Signs of crisis bottoming out as fall in house prices slows
Published 05/04/2011 | 05:00
TENTATIVE signs have emerged that house price falls may be beginning to slow down.
Two new surveys showed a crash of 43pc in the price of property since the height of the boom but they also found evidence that the rate of decline was starting to ease, prompting hopes for existing homeowners that the worst of the crisis could be coming to an end.
The latest Daft.ie survey of asking prices found that prices were down 3.1pc in the first three months of this year, compared with the last three months of last year.
That was the second smallest decline in a three-month period since the property crash began in 2008.
A similar survey from MyHome.ie found that prices in Dublin were down 15pc last year, but this was the lowest annual fall for the capital since prices began to nosedive.
Economist Eoin Fahy, of Kleinworth Benson Investors, said prices could be bottoming out, adding: "The latest Daft survey shows that the fall in prices may be beginning to slow."
The national average asking price for property has fallen by 43pc since the peak and stands at €210,000, while the average time to sell a property is nine months, the same as a year ago.
In Dublin, asking prices fell by 4.1pc during the past three months, while in Galway prices fell by almost 5pc.
In Cork and Waterford, prices dropped by about 3pc, while Limerick city saw falls of just 2pc between January and April.
Outside the main cities, asking prices fell by 2.7pc -- the smallest fall in three years.
However, the housing market will be hit by higher European Central Bank rates. This will mean first-time buyers will be approved for smaller mortgages, while existing borrowers will face higher repayments.
And economist Anne Hughes, of DKM Economic Consultants, authors of the report, warned of more falls.
Weak employment figures, falls in income and increases in the cost of living are all key factors dampening activity levels in the housing market.
But she said some green shoots had begun to emerge. "The moderating pace of price decline in Dublin is to be welcomed, as is the fact that affordability continues to improve," she added.