Lack of supply to drive the domestic market for 2017

IN property terms, the first five weeks of the year have seen good levels of activity. Lack of supply was still the order of the day, however, where available, demand was strong from firsttime buyers (FTBs), primarily for new homes. The FTB is now armed with the help-to-buy funds (up to €20,000) plus the recent rule change allowing them to borrow up to 90pc of the purchase price.

The month of February can often be unpredictable in transaction terms, Following a flurry of activity after Christmas, activity can taper off and generally resumes its momentum closer to St Patrick’s weekend. The Irish property market is, however, less cyclical than in bygone days. Be under no illusion, the main driver for the market this year will be on the supply side. According to Marian Finnegan, chief economist with Sherry FitzGerald, in their recent outlook for the coming year, single-digit increases are expected nationally, with the largest increase likely in the regions where a fully functioning market has now resumed.

The two elephants in the room are, of course, US president Trump and Brexit. Two considerations that lie completely outside our control but will have an impact on consumer confidence, which is a determinant of the market.

Still, the economic fundamentals in Ireland remain positive. Unemployment has fallen to 7.1pc (full employment is regarded as approximately 4pc), less than half its November 2010 figure — a remarkable indication of the reversal in fortunes of the Irish economy. Interest rates remain close to zero and, according to the Central Bank, the economy is still expected to increase in size by up to 3pc this year, despite all of the above.

The remarkable thing about the US and UK domestic situations is that we still have no clarity on the implications for the Irish economy and property market.