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Housing market expected to double by 2020

Written by Robert McHugh, on 26th Oct 2016. Posted in Ireland

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It was another strong quarter of growth in mortgage lending in the third quarter according to data from the Banking & Payments Federation of Ireland.

Mortgage drawdowns totalled €1.6bn, up 17% on the year. Of this, €1.4bn was for new lending towards house purchase or €3.4bn year-to-date.

The figures show that mortgage approvals continue to grow at a rapid pace, up 38% in the third quarter, signalling a strong final quarter for new lending. Davy stockbrokers have today re-iterated that they are happy to leave their full-year forecast for house purchase at €5bn in 2016, up 13% from €4.4bn in 2015.

According to Davy Stockbrokers, "Longer-term, we expect the market to double by 2020. In our latest housing market forecasts, we have mortgage lending for house purchase doubling to €10.2bn by 2020. However, if transactions and house prices recover at a faster pace, the market could be as large as €12-15bn. The new Help to Buy scheme – while not as large a subsidy as the UK Help to Buy at 5% of the purchase price – should reach a broader section of the market, given that first-time buyers are now over half of new mortgage lending."

They added, ""At most, the scheme could be used against the current 15,000 per annum completions, but this represents the top end of a range from the low 1,000s. Nonetheless, the scheme might get off to a slow start given the dearth of new build supply in urban areas where demand is greatest, risking appreciation in house prices in the short run as more buyers bid on a finite housing stock."

Source: www.businessworld.ie

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