A report from NCB Stockbrokers has forecast that a growing population and increased levels of immigration will sustain demand for housing and support prices.
The report says between 50,000 and 70,000 homes a year will need to be built over the next 15 years to satisfy demand. NCB believes immigration will accelerate because of the freedom of access granted to citizens of the 10 most recent EU entrants.
The report adds that increasing wealth is also supporting investment in second homes, with more than 10,000 second homes a year now being built.
NCB's report is optimistic on debt levels, saying the rise in debt is sustainable as it came from a low base and mortgage debt amounts to only 25% of the value of the country's housing stock. It estimates that mortgage repayments were 31% of disposable income last year, pointing out that even a rise in euro zone rates to 4% would still leave this figure below 35%.
NCB says that despite a recent renewed acceleration in house price growth, there is no evidence of speculative building.
Meanwhile, figures from the Government showed that 62,248 homes were completed in the first ten months of this year, up 2.3% on the same period last year.
