Freefall in property prices to continue, say experts
HOUSE prices will keep falling this year despite values hitting levels where average workers can afford to buy.
Very little mortgage lending, a low level of property transactions and economic uncertainty meant prices would continue falling in 2012, economists said.
The comments came as the latest figures show no let-up in the pace of house price falls.
Prices have dropped by half since the peak of the market, according to the figures released yesterday by the Central Statistics Office (CSO).
In the last 12 months alone, property prices fell by 16.7pc.
Property prices in December fell at their fastest annual rate in almost two years.
But prices are likely to have fallen much further as the CSO data does not capture cash sales, which tend to be lower than mortgage-financed sales.
Housing experts reckon between a quarter and a third of all property transactions are now cash purchases.
In December alone, prices of houses and apartments were down by 1.7pc. Since the peak in 2007, residential property prices have now fallen by 47.2pc, and by 55pc in Dublin.
Apartment prices in Dublin rose for the second consecutive month. They increased by 1.3pc in December after rising by close to 5pc in November. But apartment prices remain 15.6pc down on the year.
Calculations based on the CSO figures show that the price of a house nationally is now €166,000, down from €314,000 during the boom.
In Dublin, prices have fallen to €195,000 from €431,000 in 2007. Outside the capital, the average price is now €152,500, down from €268,000.
Davy Stockbrokers' Cathal MacCoille said: "With low transactions, constrained mortgage lending and an uncertain economic environment, house prices are likely to continue falling in 2012."
It now costs little more than three times the average salary to buy a house here, as against 10 times at the height of the boom.
Bloxham Stockbrokers economist Alan McQuaid said: "This is good news for people trying to buy a property and get on the housing market ladder.
"But the continued drop in prices is bad for consumer confidence overall."
He said he expected prices to fall another 8pc this year.