MORTGAGE FINANCE remained a stumbling block for home buyers, pressure on office rents continued and sales of retail premises were “dead in the water” in 2011, according to the annual property report by the Society of Chartered Surveyors.

However, the 319 chartered surveyors questioned for the report were optimistic about the Dublin residential property market, forecasting that prices would stabilise this year as a result of a dearth of new urban developments. The residential rental market had also “held its own”, with rents in certain parts of Dublin rising by between 5 and 7.5 per cent, the survey found.

Surveyors also reported healthy sales of agricultural land or development land for agricultural purposes in Leinster and Munster. Prime farm land in Tipperary and Kildare was sold for between €10,000 and €12,000 per acre last year, compared to a national average of €8,600 per acre.

The report highlights what it calls the “suburbanisation of retail”, whereby out-of-town shopping centres are performing better than town centres. Lettings in the retail sector increasingly tend to be short term – between two and three years – with tenants insisting on significantly lower rents, shorter lease terms, break clauses, rent-free periods and turnover-based rents.

Respondents believe that State assets agency Nama, which controls a number of hotels, still has “unrealistic asking prices” for those properties.

The power of Nama to “dictate and control” the property market was criticised in general, with some respondents believing it was preventing a normal market correction.