In its latest report on the Irish housing market, international property advisor Savills says that new mortgage rules and the ECB's recently announced quantitative easing programme will have a big impact on investor demand for residential property in Ireland.
It warns that the introduction of stricter mortgage regulations will not slow down price increases - it will just mean that less young buyers, and more investors will be purchasing Irish properties.
Dr. John McCartney, economist and director of research at Savills says:
"By increasing the down payment that is needed to qualify for a mortgage, the Central Bank rules will inevitably lead to first time buyers spending longer in rented accommodation. This guarantees a stable platform of demand which will undoubtedly encourage landlords to invest."
He continues: "By diverting demand into the rented sector the new rules will lead to stronger rental growth. In time this will attract investors who will compete with everybody else to buy properties. Therefore the new measures will do nothing to soften house price growth by curtailing demand. They will simply increase the ratio of investors to first time buyers."
The report predicts that prices will continue to increase - but not at the same pace that they did in 2014.
Savills foresee a return to "commuter culture" - there will be a significant increase in the prices of properties in the capital's 'commuter counties' with prices increases being particularly sharp in Meath, Kildare and Wicklow.
Elsewhere, Savills Director and Head of Residential, Graham Murray echoes other industry insiders who foresee a steep increase in the number of UK buyers coming into the Irish market as the ECB's quantitative easing programme weakens the euro.
