A new report on the property market from IIB Bank predicts that house prices will rise by 8% this year.
Research prepared by economist Austin Hughes showed that Irish housing wealth - the market value of houses minus housing-related debt - has risen by 350% since 1996 to €375 billion. This is four times bigger than household income, a far bigger figure than in other countries. The figure for the US is 1.2 times income.
The bank believes this 'astonishing' build-up in wealth in the past 10 years will support the market in the future.
IIB also found that someone who bought an average-priced Irish house at the start of the SSIA scheme in 2001 is likely to have seen the value of a property rise by €110,000 by the time the first SSIAs mature.
The bank expects SSIA money to generate as much as €10 billion of spending on property by the middle of 2007. This, along with high levels of immigration, will support strong demand for housing over the coming year, according to IIB.
It believes these positive factors will 'more than offset' the prospect of an increase in euro zone interest rates to 3% by late summer.
