Higher than expected immigration, maturing SSIAs and low interest rates will sustain the buoyant Irish property market in the coming years, according to a new study.
The study by IIB Homeloans found that the effect of immigration has been greatly underestimated in some quarters and forecasts that migrant workers will require 25,000 dwellings every year.
Irish property wealth is likely to increase by about €22 billion in the next two years, and maturing SSIAs could imply an even larger increase.
According to the study's author, IIB economist Austin Hughes, many SSIA savers are using the accounts as property savings accounts as surveys show that SSIA holders are twice as likely to buy a home than other consumers.
SSIAs could boost the demand for housing by around 16,000 units in the next couple of years. In addition, an extra €1 billion will be spent on home improvements.
Adding to the rosy outlook for the property market is the benign outlook for interest rates. Mr Hughes says that ECB may want to but will be unable to begin to raise rates for another 12 months due to sluggish growth in the euro zone's big economies.
Speaking today, IIB chief executive Tom Foley noted that competition among mortgage providers remains intense but the market as a whole is still dominated by sensible borrowing and lending practices.
As a result, Mr Foley said, the market has not seen a proliferation of exotic and occasionally risky mass market products that are becoming more commonplace in markets such as the United States.