DAVY VIEW

Residential property prices grew 9.7% in October, close to the double-digit rates seen in recent months. However, rapid increases in Q4 last year mean some reduction in headline growth rates is likely to occur. As a result, while we expect some deceleration in prices next year, strong base effects support our forecast for a 7% rise. A positive indication for new dwellings supply was that the number of transactions in new homes grew 26% in October. This supports our forecast for a strong increase in Q4 new dwelling completions, bringing the full year total to 34k.