Over 77,000 new housing units will have been built by the end of 2005.

ONCE again the property market has confounded the pundits, with another buoyant year in new homes sales and waiting lists already building for 2006.

The Construction Industry Federation (CIF) is forecasting that over 77,000 new housing units will have been built by the end of the year, an increase of around 1,000 on last year's record figure.

"Unbelievably strong" was the verdict of all agents, a storming year that took even the most optimistic by surprise.

Looking back, a number of factors combined to produce such upbeat results. Supply increased and demand kept pace.

Immigrants began to buy, swelling the ranks of native first-time buyers.

The rental market took an upturn, pulling investors back to the Irish new homes market. Immigrants in need of housing were the driving force behind the recovery of the rental sector.

As autumn approached and tax deadlines loomed, investors mopped up most of the Section 23 and Section 50 properties launched this year.

Confidence in managed pensions continued its nosedive and more people turned to property portfolios as a way of ensuring their future. This swelled the ranks of investors chasing tax break apartments.

Should the Government end tax-break schemes in the next budget, anything left for sale could rise in price considerably.

Sites purchased with the expectation of tax designation will drop in value. First-time buyers who held back in the hope of a drop in prices will now be regretting their decision, says Ken MacDonald of Hooke & MacDonald.

This agency has sold over 6,000 units so far in 2005 and notched up over €2 billion in sales, with at least 50 per cent in the hectic autumn season.

"These so-called experts have never got it right in the past decade. The market is unbelievably strong- even if interest rates double, as has been forecast, it won't affect sales," says Ken MacDonald.

First-timers dominated the market, accounting for 80 per cent of sales with some agencies