House prices down €27,500
Related Articles
HOUSE prices fell by 9pc in the past year, wiping €27,500 off the value of the average home.
National house prices fell by 0.7pc in March, according to yesterday's Permanent TSB/ERSI house price index. But the price decline for first-time buyer houses was greater, at 10pc, as potential buyers have been squeezed hard by banks hiking up interest rates for new customers.
A 10pc drop in First-Time Buyer (FTB) house prices will see some 40,000 new buyers go into negative equity by the end of the year, according to Davy Stockbrokers.
Negative equity is when the value of the mortgage is greater than the value of the home.
Economists also warned that prices will have to fall further if first time buyers are to be enticed back into the market.
New buyers have also been hit by the withdrawal of 100pc mortgages, and the need to find deposits of up to 10pc. Over a third of FTB's took out 100pc mortgages in 2006, according to Davy Stockbrokers.
In the first three months of this year, average house prices fell by 2.2pc compared with falls of 3.9pc last year. Prices fell 0.8pc in February and 0.7pc in January.
In the year to March, house prices were down 8.9pc. The average price paid for a house in March was €281,643 compared to €309,071 in March 2007.
Easing
Goodbody Stockbroker economist Deirdre Ryan said the pace of monthly declines appeared to have eased. But she warned that the worst was not over and further house price declines were likely for some time.
Goodbody expects house prices to fall a further 7pc this year, which would mean a drop of 15pc since prices peaked at the start of 2007.
Dublin house prices were down 0.2pc in March, while there was a reduction of 0.6pc in the rest of the country.
For the first three months of 2008, prices for Dublin were down 1.8pc and prices outside Dublin were down 2.8pc.
The average price paid for a house was €390,274 in Dublin and €242,300 outside the capital. House prices in the commuter counties fell by 0.5pc in March, and 1pc in February.
Permanent TSB's Niall O'Grady said the figures confirmed the softening in prices and transaction numbers across the market.
- Charlie Weston Personal Finance Editor
