House prices now at 2002 levels
Further drop of 10pc is predicted before market 'bottoms out next year'
Property prices are getting close to the bottom as the pace of house-price falls eases, economists believe.
House prices fell by 1.7pc in the three months to June, the lowest quarterly fall for two years. Prices are down 35pc from their 2006 peak, the latest index from Permanent TSB and the Economic and Social Research Institute (ESRI) says.
Economist with NCB Stockbrokers, Brian Devine, said house prices were now close to the bottom; Ronan Lyons of property price website Daft.ie said there were signs that parts of the Dublin market were stabilising.
The average house price, at €201,364, is now at a level not seen since the end of 2002. This is a fall of €110,000 from €310,831 at its peak in 2006.
The index, which is based on agreed sale prices and is calculated using data from mortgage drawdowns, shows that prices fell by 6.4pc in the first six months of 2010. Looked at over 12 months, prices are down 17pc. Dublin house prices fell by 3.5pc in April, May and June -- double the fall of houses in the country as a whole.
The capital's price fall in the second three months of this year compares with a reduction of 10.3pc in the first three months of this year, and a fall of 7.5pc in the last three months of last year. House prices outside Dublin fell by 0.8pc, compared with a fall of 3.5pc in the first three months of the year
Permanent TSB's Niall O'Grady said the figures could show that prices are starting to find a more sustainable level, after almost three and a half years of decline.
"While prices continue to fall at different levels in Dublin, versus the rest of the country, the reduction in the second quarter is the lowest recorded quarterly fall in almost two years," he said.
Some commentators have predicted that house prices in Ireland are likely to fall by another 10pc this year, before reaching the bottom next year.
Mr Devine of NCB Stockbrokers said the sharper fall in Dublin's house prices was closer to where he expects national house prices to end up.
He said that the general perception in the property market was that prices are actually down by between 40pc and 45pc because of the narrow terms of the Permanent TSB/ESRI index.
The economist said the index reflected the mortgage lending of just one bank, while the property price figures can be between three and six months out of date as they are based on agreed sales prices.
It can take a number of months between a house sale being agreed, and the mortgage money being drawn down.
Director of the PIBA mortgage-brokers group, Rachel Doyle, said the squeeze on bank lending was hindering a recovery in the housing market.
She said a recent survey carried out by the Irish Banking Federation showed there had been a 60pc drop in new mortgage lending last year, when compared with 2008.