Builders say house prices to level off

Most builders expect new house prices to remain level this year, a survey published yesterday shows.

The Merrion Irish Housebuilder Survey shows that 67 per cent of construction companies believe their house prices will remain unchanged this year, while 12 per cent say that they will increase.

The remaining 21 per cent are expecting house prices to be lower.

However, the study shows builders will cut supply rather than prices if the market were to to weaken in future. It also indicates the number of new homes built in the State during the year could be fewer than the 82,000 agreed by most forecasters.

"Of the 76 per cent that expect completions to decline, 27 per cent expect a decline of 0 to 10 per cent, 21 per cent expect a fall of 10 per cent to 20 per cent and 27 per cent see a fall of greater than 20 per cent," the survey says.

The remaining 24 per cent are evenly split between expecting sales to rise and to remain unchanged.

Three-quarters of housebuilders expect the number of homes that they will sell in 2007 to fall.

The majority of those surveyed blame weakening confidence, affordability and higher interest rates for slowing demand. They also believe ongoing uncertainty over stamp duty is a key factor.