House prices Summer 2008
At mortgages.ie we see hose price movement and market sentiment at first hand.
Our experience in Summer 2008 is that many first time buyers are holding off waiting for prices to fall further before they make a move.
We expect interest rates to rise to over 4.5% this year as the European central bank struggles to keep a hold on inflation which has rocketed to 3.75% over the past year.
The central bank in the past has maintained a wider margin between borrowing costs and inflation and if this margin was in operation today base rates would be above 5% .
This will add pressure towards a continued downward trend in house prices and the price of borrowing will go up.
One scenario is to bargin well ( and keep bargaining) and try and get a reasonable fixed rate for three to five years.