Housing market to remain sluggish

House prices in Ireland are unlikely to fall further but it will take a number of years before the market picks up again, a new report from ratings agency Standard and Poor's has concluded.

The agency says that with house prices down by at least 33 per cent from their peak - the largest contraction in Western Europe since the global economic crisis began - the decline in the cost of housing has now bottomed out.

"In terms of market fundamentals, the price contraction implies that affordability is back to its pre-2000 level, which suggests that unlike other markets, Ireland has pretty much fully corrected the excess of the previous housing bubble. Still, this does not mean that the market is about to pick up again soon, in our view," the report says.

S&P says the oversupply of property is likely to negatively impact on the market for some time to come. It adds that with growth expected to remain weak this year and a likely gradual rise in euro zone interest rates, there is little to be optimistic about in the short-term.

Source: IrishTimes.com