Irish consumers expect a soft landing for the property market with house prices moderating but not falling in the next twelve months, a new survey shows today.
The survey carried out by IIB Bank and the ESRI finds that one-in-ten consumers think house prices will fall with six out-of-ten seeing further price increases while the remainder expect little change. This pattern of price forecasts doesn't suggest a 'bubble' psychology is prevalent among Irish consumers, IIB says.
Its analysis suggests that as Irish households expect only modest increases in property values, the risks of severe disappointment that could trigger panic selling prompting a crash seem limited.
Another feature of the results is the absence of significant divergences in price expectations between owners and non-owners who might see themselves as priced out of the market.
Instead 4 per cent of Irish adults said they are 'definitely' set to purchase property in the next two years, with a further 6 per cent contemplating a purchase.
This suggests that one in ten adults will consider purchasing property in the next couple of years, a considerable proportion of the population sufficient to fuel demand houses for some time to come.
If both groups were to purchase it could be consistent with additional demand for up to 150,000 units, though this estimate should be seen as the most optimistic.
The results of the survey confirm that it is those in the younger age groups who are most likely to move. However, nearly 8 per cent of those aged 50-64 responded that they would certainly move or would consider moving, suggesting that the wish to trade down or realise the equity may be underpinning demand in the older age groups.
The survey was carried out in conjunction with the usual IIB/ESRI monthly survey of Consumer Sentiment in August and was based on a sample of approximately 1,100 Irish households.
The main August survey saw a marginal change in consumer sentiment and was conducted ahead of the beginning of the Autumn house purchase season. So these results should not have been biased as a result of changes to perceptions of the 'macro' climate or the onset of a key period for the property market.