Friday, September 27 16:12:14
A new report from Goodbody Stockbrokers, which contains a detailed analysis of the prospects for the Irish property market, says recent signs suggest the market has passed the bottom and is now in a gradual recovery phase.
The report, by Goodbody Chief Economist, Dermot O'Leary, says that while property markets move in classic cycles of boom and bust, the most recent cycle in Ireland will go down as one of the most spectacular. Commercial prices are down by 67pc, residential prices have halved and construction output has collapsed by 80pc.
The report also says that the Irish economy is now in a gradual recovery phase with GDP expected to grow for the third consecutive year in 2013, but more importantly for the property sector, domestic demand is forecast to grow in 2014 for the first time since 2007.
Speaking about the commercial property market, Dermot O'Leary said "The commercial property market is highly correlated with the economic cycle. In the office market, booms and busts are a frequent occurrence in Ireland; the most recent was the fifth since 1970.
The Goodbody report estimates a housing need of 10,000 new units per annum up to 2016 in the Greater Dublin. As the supply is worked through and the number of households continues to rise, Goodbody estimates that housing demand nationally will rise to 21,000-26,000 units in the period from 2016 to 2021, before rising further to 26,000 to 36,000 in 2021-2026.
Construction output as a percentage of GNP is now the lowest in the EU. While a rapid recovery is unlikely in the short term due to constraints such as lack of working capital and oversupply in certain areas, a recovery beyond 2015 could see construction activity grow by 10pc per annum.