Rising immigration and continued income growth will support prices in the Irish housing market in the coming years according to new research from NCB stockbrokers.
In another upbeat report on the state of the Irish property market, NCB said the recent rise in debt in Ireland appears sustainable because ability to repay is robust.
NCB economist Eunan King said: "Immigration, which recently appears to be running at 11,000 per month, is key to supporting house completions in the coming years."
This level of immigration together with domestic demand for housing implies an annual requirement of between 50,000 and 70,000 housing units for the next 15 years, according to NCB's estimates.
NCB based the monthly immigration figures on the number of the number of applications for PPS numbers rather than the official data on immigration prepared by the CSO. The CSO data recorded a net inflow to in the year to April 2005 from the ten new countries of 26,000 migrants.
The broker is also less concerned with the mounting level of personal debt than the Central Bank which has recently warned consumers about overextending themselves.
Mr King said "The rise in debt in Ireland appears sustainable because ability to repay is robust, initial levels of debt were low and the wealth and assets against which most of the debt is secured is a multiple of the debt. Presently mortgage debt is only 25 per cent of the value of the housing stock."
The NCB report points out that mortgage repayments are estimated to be about 31 per cent of disposable income in 2005. Even if interest rates rise to 4 per cent, this percentage would still be less than 35 per cent of disposable income, the report stated.