Home prices drop to lowest level in more than four years
The average house price is now €253,546, the lowest since November 2004
Friday April 24 2009
House prices slipped 1 percent in March, extending a slump and reducing average prices to their lowest in more than four years.
Prices fell 3.1 percent in the first quarter and are down 10 percent from a year earlier, according to an index published today by Irish Life & Permanent. The average house price is now €253,546, the lowest since November 2004.
Ireland’s economy is facing one of the worst recessions in its history due to the combined impact of a property market collapse and the global financial crisis. While the European Central Bank has cut interest rates to a record low, the property market remains in a slump as unemployment soars and consumer confidence weakens.
“Despite improved affordability and six reductions in interest rates, customers lack of confidence in the economy results in them staying out of the property market,” said Niall O’Grady, business strategy manager at Irish Life.
The economy may shrink 8 percent this year, the most of any euro-area nation, the government has forecast. As it tries to control a swelling budget deficit, it has raised taxes and cut some welfare benefits, adding to pressure on consumers.
In Dublin, where one-quarter of Ireland’s 4.2 million population lives, prices declined 14.2 percent in March from a year earlier to an average of 334,822 euros, today’s report showed. (Bloomberg)
- Colm Heatley
