Lower prices mean budget squeeze

The economic consultancy has just released its latest forecasts and they show house prices falling in the second half this year to sit 2.7% below their December 2016 level.

This decline will be due to the dampening effect of tighter mortgage lending conditions and higher interest rates.

Infometrics chief forecaster Gareth Kiernan said the emergence of flat or falling house prices within the next few years will undermine consumers’ willingness to spend.

At the same time, the discretionary portion of households’ budgets will be squeezed as interest rates gradually rise from their historic lows.