A review of the Irish property market predicts a record year for home building and mortgage borrowing.
The Bank of Ireland quarterly review of the property market indicates that home building will rise by five per cent this year to 75,000 units.
According to Dr Dan McLaughlin, Chief Economist at Bank of Ireland, demand for property is still very strong as a result of a stable economy and low interest rates. Dan McLaughlin says that the review shows supply is finally catching up with demand.
That means the Irish economy is building over 200 houses a day.
The report also predicts that the rate of price rises will decline to around six per cent as the supply of housing increases.
According to the report, the surge in supply is the result of an increase in the construction of apartments, which now account for one in four of all new units. For the first time, Dublin is lagging behind the rest of the country when it comes to price increases. In the 12 months up to June 2004, prices in Dublin rose by 9.6 per cent. Outside the capital, prices rose by 13.4 per cent.
The bank predicts record levels of mortgage lending this year but played down concerns that buyers are overborrowing. Joe Larkin, director of personal lending at Bank of Ireland, says that the number of repossessions in Ireland is very low and people are comfortable with the level of borrowing.
An RTÉ News report broadcast on 6 August 2004. The reporter is Vivienne Traynor.
