Have we hit bottom?
ON AVERAGE Irish house prices have fallen by about 40pc from their peak but prices vary considerably from the national average, depending on location as well as by the age of the house and the type of property.
It is clear that family houses have not fallen in price as much as other house types. For instance new detached houses have fallen by less than 33pc on average to €275,000 for a four bedroom version. The larger five-bedroom version have fallen by even less, 32.7pc, but then again the extra bedroom, and most likely the larger plot size, will cost an extra €70,000 bringing the price for an average new five-bedroom detached house to €345,000.
The willingness of some developers to cut prices has seen new homes prices in many areas pitched below secondhand versions.
However nationally most new homes are on average dearer than their second-hand equivalents. This may be explained by quality of the fitout etc or by the fact that most families who are seeking to move out of apartments intolarger homes still have to pay stamp duty on second-hand homes but not on new homes.
In contrast to the larger houses, apartment prices have fallen by between 41pc on a national average for second hand onebedroom units to as much as 45pc for new two-bedroom units. But in some areas, such as Cavan and Waterford City, onebedroom apartment prices have fallen by an estimated 60pc plus. Waterford City claims to have the cheapest one-bedroom units at €70,000.
Other areas to see one-bedroom prices fall below €100,000 include Cavan, Carlow, Longford, Limerick County, Offaly, Laois and Westmeath.
Tipperary joins Cavan and Longford for the cheapest twobedroom apartments — below €100,000.
The smallest price declines have been recorded in the second- hand apartment market in Co Limerick where two bedroom units fell by only 5.4pc.
One agent said it was due to the lack of these types of homes in the county while another pointed out that Limerick prices had never experienced the rises seen elsewhere.
Nationally the more pronounced decline in apartment prices can be attributed to a much greater level of oversupply in the market and the collapse in demand from investors, who accounted for a significant share of the apartment demand during the boom.
For buyers in search of bargain family homes, the 50pc plus price drops may prove an attraction for four- and fivebedroom detached houses in Galway, Kilkenny, South Dublin, Dublin City centre, Monaghan and Westmeath.
Nevertheless despite these drops, buyers will still have to pay more than €1m for some of these houses in Dublin. For instance the average secondhand five-bedroom house in Dublin City centre will cost €1.25m which is the dearest in the country. And a four-bedroom version in the same area, which is located between the canals, will cost €1m on average.
Outside of Dublin larger houses in Co Wicklow are the dearest. These will set a buyer back €550,000 for a new fivebedroom detached house in the Garden County which is even dearer than three areas in the capital — Dublin North city, city centre and the western suburbs.
In contrast to its apartment market, Waterford City’s family homes market is relatively expensive with their five bedroom detached houses in the €440,000 plus range and ranking eighth most expensive of the 31 areas covered by the survey.
Critically, however, the data suggests that average national prices have further to fall if we are to see the 50pc peak to trough decline which has been predicted by some economists.
Of course, not all locations will necessarily experience price declines of this magnitude, although the converse is true in that there will be locations where price declines will be well in excess of this. Equally, there are likely to be areas of the market where prices have already reached a floor.