Asking prices for houses fell 19pc last year
Published 07/01/2010 | 05:00
ASKING prices for homes around the country plummeted 19pc during 2009 and are now more than 30pc below the peak levels of early 2007, a new report has revealed.
The national average asking price at the end of 2009 was €242,000 -- a fall of €107,000 from the peak, according to the latest report from property website Daft.ie.
However the market is expected to show signs of recovery towards the end of this year.
Dublin has seen the sharpest fall in asking prices -- down 42pc from their 2007 peak -- while Limerick has seen the smallest fall in house prices, down 21.5pc from their peak.
The drop in prices came as it was revealed that the level of house-building starts has fallen to the lowest level on record.
Latest figures from HomeBond, the house building insurance agency, shows its registrations of new homes fell to 3,337 in 2009. This is even lower than the 3,781 registered in 1978 -- the year that HomeBond was established and it was operating for only about half of that year.
Nevertheless, average south-Dublin county prices are still the highest in the country at €427,903 which is more than double the average for Co Limerick. Co Longford now offers the cheapest houses at €149,098 -- down 36pc from their peak.
Average prices in counties Cork, Galway, Waterford and most places around the country have fallen on average 30pc below their peak.
In most parts of the country, the average time to sell a typical property now takes about nine months, while Dublin selling periods have fallen to four months.
But in a commentary accompanying the report, economist Alan McQuaid of Bloxham Stockbrokers predicted prices could start to rise in the second half of this year.
"We will see positive year-on -year (economic) growth in the second half of 2010, and that may result in a slight increase in house prices towards the latter part of the year," he said.
But that increase will only pare back a fraction of the falls yet to be seen in 2010 so this year will end with prices still 10-15pc on average below those at the start of the year. He expects Dublin to again record the biggest decline.
Mr McQuaid added: "As prices start to recover, Dublin should see larger gains than elsewhere, though the major cities should quickly follow the upward trend of the capital. Looking ahead I expect house prices to be higher on average in 2011 than in 2010 and should rise on a five-year view as the labour market returns to normal.
"That said, the level of any increase over the next few years is likely to be only in single digits, with three factors -- the banks' adoption of a more cautious stance to lending, the return of interest rates to normal and the possible introduction of a property tax for principal homes -- all weighing heavily on the market.
"Although houses have in general become more affordable in terms of price, this is of little comfort to potential purchasers if credit is still very tight," he said.
Within Dublin the lowest fall was seen in north-Dublin county -- down 30.3pc to an average of €290,846. In contrast, Dublin City centre saw the sharpest fall -- down 42.7pc to an average of €245,352.
This latter reflects apartment sales mainly by investors and to a lesser extent by young families who want to raise funds to buy the now more-affordable houses in suburbia.