Gunne Estate Agents stressed today that the severe mismatch that exists between supply and demand in the residential sector, particularly in major population centres, will mean that house prices will continue to rise.
They were responding to a report issued by Hibernian Investment Managers yesterday, which claimed that house prices could fall by 20% in the next two to three years.
Gunne claim that house prices will rise by an average of 10% nationally this year and 15% in the Greater Dublin Area.
In their recent review of the residential property market 'The Residential Property Market - The Realities', Gunne highlighted the severe mismatch that exists between supply and demand in the residential sector, particularly in major population centres. While such a large discrepancy exists between population growth and housing supply, house prices will continue to rise in the short to medium term.
Gunne admitted that while it is unrealistic to expect that house prices will experience the unsustainable rates of increases of the late 1990's, house prices will continue to increase. Their research indicated that house prices will rise by an average of 10% nationally this year and by 15% in the Greater Dublin Area.
The Hibernian Investment Managers report also claimed that house prices will suffer because of a slowdown in the US economy, but Gunne argued against this notion. They maintain that while US multi-nationals are certainly very important to the Irish economy, they account for 90,000 of the total 1.7 million people at work, which equates to only 6% of the total workforce.
Even if job losses occurred, they maintain it would not be very significant in the overall context of the economy, particularly taking the current labour shortage here into account.
Gunne said that while the Irish economy will no doubt experience a slowdown this year as a result of international instability, Ireland's unique demographic and economic profile will ensure that house prices will not fall.
