House sales to pick up in 2010

OVER 10% more houses will be sold this year compared to last, according to estate agent’s representatives Fnaim.

Fnaim president René Pallincourt says it is likely there will be more than 600,000 sales in the non-new-build sector, up from around 550,000 last year.

"There will be no sudden rebound, but with the low interest rates, buying conditions are getting better, notably for households with an income of around €3,000.

"What’s more, buyers have taken on board the fact that prices will not drop any more and have stopped speculating on lowering prices."

Over the last year prices dropped 4.9% (with drops most marked in houses compared to flats), and interest rates are now at their lowest historically - at under 4%.

While this year should therefore see sales rise again, experts say there will be no sudden return to 2008 levels of 670,000 sales, let alone 800,000 seen at the start of the last decade.

Factors restraining a rapid comeback include rising unemployment and a lack of sufficient houses on sale, with 60% of would-be buyers saying they cannot find a suitable property and only 11% of owners saying they think this is a good time to sell. What is more, an Ifop study commissioned by Fnaim showed 51% of potential buyers said it was hard to get a mortgage and 76% thought that prices were still too high.

As for price predictions for the year, Fnaim expect stabilisation, but say fluctuations of up to 3% in either direction are possible, and they might drop further in some isolated areas or those with especially high unemployment.

Estate agents chain Century 21 say what happens to interest rates will determine what happens to prices - if they stay at current levels, they say there could be price rises of about 1-3%, but if they increase then prices might have to lower. They think that, at least in the first half of the year, a slight rise is the most likely scenario.