IAVI predicts 5% property growth

 

Property prices in the State should grow by around 4 to 5 per cent this year, according to the body representing estate agents.

In its annual property survey for 2006, the Irish Auctioneers and Valuers Institute (IAVI) said last year's property market "continued to confound the pessimists", with a record 92,000 new housing units completed and strong capital values for the year across the country.

However, the survey reveals estate agents expect residential values to rise "more modestly" in 2007.

"The survey confirms that 2006 was a year of two halves in the Irish property market with Dublin auction prices rocketing in the first half of the year but 82 per cent of houses being withdrawn from auction in the second half," the report states.

Alan Cooke, chief executive of the IAVI said 2006 was "an amazing year" for residential property, with unprecedented growth of as much as 25 per cent in the upper end of the Dublin auction market in the first quarter.

He noted that what was effective stagnation followed in the autumn, with widespread withdrawals at auction - which he blamed on overly optimistic price expectation on the part of vendors and uncertainty surrounding the levels of stamp duty that emerged in the autumn in the run up to the budget.

"Outside Dublin, this contrast was present in most areas, but was not so drastically demonstrated. Growth in residential capital values for 2007 is expected to be a modest 4-5 per cent," Mr Cooke said.

"Commercial property put in another strong performance in 2006 and the outlook for 2007 is for growth of up to 5 per cent in rents and a further if modest hardening of yield."

The IAVI prediction for property growth this year is in line with yesterday's prediction by IIB Bank, which forecast modest growth of around 5 per cent in property prices for 2007.