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Property to fall until 2010 - Anglo Irish Bank

  • 14-04-2008 5:37pm
    #1
    jetski
    Registered Users, Registered Users 2 Posts: 820 ✭✭✭


    Homeowners will have to wait almost two years before the value of their properties starts to increase again and even then, price growth is unlikely to beat inflation, the chief executive of Anglo Irish Bank has warned.

    Speaking to the Sunday Independent last week, David Drumm said he does not expect house prices to recover until 2010 and that any price growth then will match inflation.

    "House prices will see a high single-digit fall this year and will be flat in 2009," said Drumm.

    Only builders who are prepared to knock between 15 and 20 per cent off their sale prices will sell their properties this year, added Drumm. "Anywhere there has been substantial price reductions of 20 per cent or so, demand has come back," said Drumm. "The slowdown will lead to new estates being launched at appropriate prices".

    Drumm said the house market was "way over-supplied" when it peaked in 2006.


    http://www.independent.ie/business/irish/property-to-fall-until-2010-1346187.html


Comments

  • #2
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,552 Mod ✭✭✭✭johnnyskeleton


    I could see the market recovering in 2010, but before that there would be have to be big drops in 2008 and 2009 (i.e. double digits).

    If you look at market drops at the moment, prices are going down by 1-2% per month, and this looks set to continue for the foreseeable future. So single digit drops in 2008 is rubbish, as is the market being flat in 2009.

    But there are so many things that are going to knock prices over the next few years - people leaving as jobs leave, people getting smaller mortgages as the banks lend less, people paying more in interest and earning less money, a complete lack of consumer confidence at the moment, people who are struggling now will be in arrears over the coming months and will start to go into the courts in a year or two, the mass of new homes being built flooding the market, the loss of investors looking for capital appreciation.


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