S&P: Ireland to see strongest rise in house prices in Europe

Ireland should see the strongest price rises among Europe’s housing market this year, according to Standard and Poor’s.

The ratings agency predicts Irish house prices will grow by 9 per cent on the back of an improving economy and short supply of housing.

“We think stronger lending controls by the Central Bank of Ireland should prevent house prices from spiralling out of control,” the agency said.

Standard and Poor’s said the German and UK housing markets should also stay on a solid growth path this year, growing by 5 per cent and 4 per cent, respectively.

"The UK has an undersupply of housing and most mortgages outstanding have a variable interest rate that adjusts automatically as the base rate changes," Standard and Poor's economist Sophie Tahiri said.

According to the forecasts, French and Italian home prices will continue to slide this year by 3 per cent and 2per cent respectively, on weak economic growth, high unemployment, and subdued consumer confidence.

The Belgian residential market could fall by 3.5 per cent following a cut in mortgage tax relief this year, while tight regulations on lending along with the renewed appreciation of the Swiss franc will put the brakes on the Swiss housing market, leading to a 1 per cent drop in prices.