What's next? Experts give their views

 

Constantin Gurdgiev, Economics lecturer in UCD and editor of Business & Finance magazine 

The property market is set for a fall in the next decade says Gurdgiev, who believes a combination of events conspired to generate a property price bubble around 2000. He believes that anyone who entered the market since 2001 will see negative equity, and thinks the ESRI's prediction of a 30 per cent fall in house values is too moderate. Outlying areas of Dublin with poor infrastructure "will be hammered" as values fall, people won't have a chance of moving out and there will be pressure on banks to foreclose on property. The best we can do now to deflate the bubble, he says, will be by a combination of relaxing regulations by bodies such as An Bord Pleanála as fast as possible, reducing the level of tax on property by replacing stamp duty with a property tax and ring-fencing it for provision of municipal services and releasing land banks. But he also believes that we need to start building homes in or near the city centre for the fastest-growing segment of the market - young families.

"What we need is continental style 100sq m (1,076sq ft) three-bed apartments."

Ken MacDonald Managing director, Hooke & MacDonald

In 10 years' time, property prices will be double what they are today, particularly in Dublin, says estate agent Ken MacDonald. "We'll have a population of one million more people than we have today," he predicts, confident that the Irish economy will see sustained growth over the next decade. He dismisses the ESRI and Economist predictions, saying "economists get it wrong all the time".

High-rise buildings will eventually come into their own. The major need will be to build apartments for single people and couples, to redress the balance in a city where 88 per cent of existing housing stock is three- to five-bed family homes.

Richard Barrett Co-owner, Treasury Holdings

It is certain that families will be forced to live in apartments by the end of the decade because of "the social cost of being behind the wheel", says Barrett. "Otherwise people living in places without public transport will be forced to drive two hours each way to get to work."

Assuming that the economy progresses as it has, there will be continued heavy immigration from eastern Europe, and immigrants will buy property as soon as possible because it is cheaper to buy than to rent. Prices will more than double in some sections of the market - in or near the city centre - but won't rise by that much in suburbs without good transport. This is where first-time buyers will find properties they can afford.

Ann Hargaden Investments director, Lisney

We will begin to see more real high-rises - 32 storeys and more - and they will become more acceptable to all of us. But it

will take more than a decade to convince Irish people to raise their families in apartments, says Hargaden. Prices generally will

level off, perhaps less in Dublin than in other places, while out-of-town areas with no facilities and away from transport might actually see a fall in house values. However, Ireland is a very open economy and if, for example, interest rates were to rise sharply, the picture in the housing market could be very different.