Most property people are asking the question: can there be another year like 1998? During the year, estate agencies were working at 110% of capacity, solicitors were having to prioritise clients' instructions and work on "a just in time basis" and, the banks were processing loans like never before. Many expect that 1999 could not be as good as the past year. I don't agree. The omens look just the same as they did this time last year. I believe that next year will be more or less a repeat of 1998 for the commercial property market.

The major indicators for the property business, namely the banks and the design professionals - architects, engineers and quantity surveyors who determine what gets built next year - are working more or less around the clock. Tenant demand is intense and money is plentiful.

Commercial property prices, as measured by the SCS/IPD Index, rose by over 25 per cent in 1998 and will probably do the same again next year. The only caveat to 1999 being a repeat of 1998 must be the risk that the economy is affected by problems in overseas economies. However, at this stage, there are no signs of any such slowdown affecting the Irish commercial property market.

The big issue for property markets will be traffic. In spite of the best efforts of the Dublin Transportation Office and Dublin Corporation, traffic in Dublin is getting worse not better. It will continue to do so. With 15 per cent more cars on the road next year than this year, there is no prospect of congestion easing. The property market is, and will continue to, react to the worsening traffic environment in Dublin. This reaction is taking a number of forms. Rising house prices in the centre and inner suburbs of Dublin are a direct result of increasing commuter journey times as city centre workers trade off leisure time for convenience.

Commercial organisations are making the same type of decision. Some businesses are moving to the suburbs, particularly to locations in proximity to the M50, to improve the efficiency of their distribution systems and be more accessible to staff. The popularity of Leopardstown and complexes such as Citywest and Parkwest are all by-products of businesses making traffic-related decisions.

The M50 is becoming the new "High Street" of suburban Dublin. Unfortunately, parts of the M50 are currently running at 94 per cent of traffic capacity (and this is before the Southern Cross section has opened - scheduled for 2002).

On the issue of money availability, I was told recently by a Dublin stockbroker that more money has been made by individuals and consortiums in Ireland over the past five years than existed in Ireland five years ago! This means that a lot of money is seeking a new home. A substantial portion of that "new money" is being placed or attempting to be placed in the property market in this country and in the UK. It is this money pressure that has been driving prices and this will continue because many private investors believe that the stock market is very volatile, over priced and subject to risk of a downward re-rating. The alternative to having money in the bank at low interest rates is unattractive when comapred with investing in property which often produces an income of 6 per cent to 8 per cent before gearing. Gearing at Euro interest rates can do wonders to IRR's.

In the eyes of the European investor, Ireland is no longer an island in the Western Atlantic with inherent currency and political risks. It is now perceived as part of the heartland of Europe. European developers and institutional investors, wishing to diversify their portfolio, now regard Ireland, and particularly Dublin, as part of their investment agenda. There are still some tax issues to be resolved for the EU-based investors, but 1999 will be the year when significant European money is placed in Irish real estate.

One concern, though, is the threat of overheating. This could bring some form of downward readjustments in the mid-term. Such readjustments occur worldwide and Dublin is not immune.

Markets have a funny knack of going into reverse just as people believe that growth can go on forever. Dublin commercial markets have been experiencing a period of "catch up" but we are now beginning to move to the point where we could easily be "passing ourselves out" and borrowing from the future.

1999 will be good year but there could easily be an adjustment early in the next century.

William K. Nowlan is a chartered surveyor and town planner who runs a property consultancy service.