Commercial and residential property values are not likely to fall significantly once the market peaks, according to a survey carried out among Ireland's chartered surveyors.
The findings will provide some comfort for anyone fearing that, like Britain a decade ago, prices will fall heavily and that there will be problems with negative equity when the market turns.
The most definitive findings in the survey by the Society of Chartered Surveyors - that the commercial market has not yet peaked - comes after the sector reported overall returns of 38 per cent for 1998.
Of those questioned, 92 per cent said they believed the market has not yet peaked while 42 per cent suggested it would peak this year and a further 32 per cent said they expected it to peak in 2000.
The housing market invariably takes off before commercial property and also slips ahead of the other sector.
The Chartered surveyors' survey, which was published in the first issue of their Property & Construction Review, shows that once again the housing market is further into the upward part of the cycle than the commercial sector and should, therefore, peak earlier.
Only 29 per cent of those questioned believe that the residential market has already peaked. A further 40 per cent said it would peak this year, while 31 per cent expect it to peak in either 2000 or 2001.
With commercial property a notoriously cyclical business, the major players will take satisfaction from the findings that 81 per cent of the chartered surveyors expect values to fall by no more than 10 per cent when the market peaks.
Only 17 per cent said that prices would drop by 20 per cent while an amazingly low 2 per cent suggested that falls might be even greater.
The current boom in the commercial market is being fuelled to a large extent by the lending institutions.
However, 59 per cent of the surveyors questioned accepted that bank policy was prudent while 22 per cent disagreed.
On a more cautionary note, Tom Dunne of the Chartered Surveyors says it should be noted that 70 per cent of those questioned agreed that current expectations by property investors on future capital values are too optimistic.
Like the commercial market, chartered surveyors do not expect a collapse in prices once the housing market peaks. About 77 per cent said that when the market turns they expected prices to fall back by only 10 per cent.
A further 20 per cent said they anticipated a fall of 20 per cent while only 3 per cent felt the fall would exceed this.
Chartered surveyors had mixed views on whether the banks and building societies were adhering to traditional lending guidelines. About 48 per cent said that the majority of them were sticking to the rules while 51 per cent said that either none, a few or a minority of the institutions were adhering to the lending criteria.
