There will be a significant slowdown in the Irish housing market this year, according to a survey by Davy Stockbrokers.
The survey said that the numbers of houses being built peaked in 2006, and that this year housing construction would decline for the first time since 1993.
"We expect 82,000 completions this year, down 7 per cent from 88,200 in 2006," the company predicted.
The survey also forecast that house prices would remain static for 2007.
The report found 51 per cent of mortgage brokers reported lower mortgage approvals than 2006.
But it also noted that only 21 per cent of brokers reported worse conditions when comparing to the fourth quarter of 2006.
"We should remember, however, that these declines are off a high base. The first quarter of 2006 witnessed record volumes of activity in the Irish housing market," the company said.
It said it was becoming more difficult for first-time-buyer to get on the property ladder, with couples having to spend 5 per cent and a single person 7 per cent more disposable income to buy the average house compared with the same period a year ago.
The company blamed the lack of affordability in the market on the 1.5 percentage point rise in ECB rates and the 15 per cent jump in house prices in the year to June 2006.
It also blamed the release of SSIAs for the increase in house prices last year.
"There was a general perception that the release of SSIAs would lead to higher house prices. House price rises became self-fulfilling. When rapid inflation resulted, housing demand was brought forward leading to even faster growth in prices," the company said.
The stockbroker said that to date the market is declining in an "orderly fashion" and was not following the US housing market collapse of 2006.
