House prices fall sharply in April as capital fares worst
Published 08/06/2011 | 05:00
HOUSE prices fell sharply again in April, with experts predicting yesterday that prices would continue to decline for at least another year.
Prices fell 1pc in April and are now down 12pc in the past 12 months.
The annual rate of decline appears to have picked up, the figures from the Central Statistics Office show.
House prices across the country are now down 40pc from the peak in early 2007.
Falls in Dublin have been more severe than in the rest of the country.
Dublin house prices are 47pc lower than their highest point, compared with a fall of 36pc in the rest of the country.
Apartment prices have fallen even faster than house prices, with a fall of 15pc in the past year.
These properties are now down 51pc since the peak in February 2007.
The CSO does not provide house prices with its index, but Goodbody Stockbrokers economist Dermot O'Leary said the figures implied that the average house price was now €180,000 in the State.
This is a fall of €131,000 from the top of the market four years ago.
Mr O'Leary said prices were now back at the levels last seen in 2002.
It now takes five times the average earnings of €36,000 to buy a house for a single buyer. This was down to a level close to where prices have been over the long term in this market, he said.
"It is clear that an unprecedented correction has taken place, but until the banking sector shows real signs of rehabilitation, facilitated by the restructuring efforts currently ongoing, there is little reason to believe that prices will rise," Mr O'Leary said.
Prices in Dublin peaked at €431,000, but have probably fallen to €226,000 on average, housing experts said.
Most Irish economists expect prices to fall by at least another 7pc this year.
Sharper falls are expected for houses and apartments outside the capital.
The property market was being hit by restrictions on mortgage finance, rising unemployment, property price uncertainty and rising mortgage interest rates, said Frank Conway of personal finance website MoneyCoach.ie.
Bloxham Stockbrokers economist Alan McQuaid said prices were likely to keep falling for a year or two.
"Looking further ahead, we think house prices should increase on a five-year view as the labour market returns to normal," he added.
But any rise over the next few years is only likely to be in single digits as interest rates rise and banks adopt a more cautious stance to lending than during the property bubble.
The prospects of the introduction of a property tax for homes will also hit the housing market, Mr McQuaid said.