Disregarding the findings of all recent numbers and reports that have been recorded, Central Bank Governor Philip Lane is reported by the Oireachtas Finance Committee as saying that he is expecting house prices to fall over the upcoming 3 years.
This statement being a bold one as the figured recently released by the Central Statistics Office reports house prices to have rose in the previous month by nearly 13%.
Such a statement that if true, would be a drastic change in the housing market and would cause chaos among buyers and sellers as the stark difference between the two different scenarios.
Though Philip Lane cannot say for sure what the housing market will do in the coming years, he made his predictions based off of a few “headwinds” that are expected to be taking a hit to the market.
Specific events that many are expecting to cause a large backlash in the economy and the housing market are Brexit and the funding costs for banks.
If a negative outcome is to be the result of either of these, they should prevail in the very near future.
With the rising possibility that ECB is going to raise interest rates and the potential effects that has of increasing the amount borrowers begin paying on their mortgages, there may be a negative impact had in terms of the housing market.
As when assessing the housing market in its current state, it is easy to notice the positive advancements such as how lending is under control and there are many buyers currently purchasing property in and near the capital. In the markets current state, there is room for further borrowing under the current rules in place, and more specifically there is room in the neighboring areas of Dublin.
It is important we see positive shifts for the neighboring areas as Dublin is getting more populated and more competitive, it is causing many home buyers to rather look just outside.
Governor Lane is persistent on the fact that prices are not set up to definitely fall but in the case that Brexit fails, his predicted result in almost certain.
, however, argues this point, saying that with the differences of supply and demand in the housing market and with demand so much greater than supply, the upward pressure on home prices is likely to go nowhere other than continually increasing.
All in all, it looks as if, based on data and recent reports, house prices are going to continue to increase unless we see a few possibilities that have little chance of actually happening. These being, a bad play out of Brexit or a rise in interest rates as supply begins to meet demand in 2019 and 2020.
Though, very unlikely, Philip Lanes accusation of the possibilities of a fall in the housing prices are prevalent.