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New figures show average home has lost €145,000 in value since 2007 peak

AROUND €145,000 has been wiped off the price of an average house in Ireland since the peak of the property boom, latest figures suggest.

Prices continue to decrease, with an almost 16pc plunge in the year up to November bringing the average house price around the country to around €170,000.

The fall has been even sharper in Dublin where the cost of a house has more than halved.

Average prices in the capital were around €431,000 in February 2007, widely held to be the height of the bubble.

This has now reduced to an average of €207,000 - a drop of €224,000, or 52pc.

The Central Statistics Office (CSO) latest Residential Property Price Index does not give average prices but only details percentage decreases based on mortgage information from the country's leading lenders.

However, actual price drops can be estimated using the now defunct Permanent TSB/ESRI quarterly house price index, which gives an indication of average prices up until earlier this year.

A 42pc drop in house prices outside Dublin signals a fall from €268,000 almost five years ago to €155,500 as of last month.

Residential property prices fell by 1.5pc last month, compared to a decline of 1pc in November of last year, according to the CSO.

The cost of a house in Dublin dipped 2.4pc during the month.

Although apartments in the capital rose in value during November they were still down 16pc on the same month last year.

Almost 60pc has been slashed off the price of an average Dublin apartment since the boom peak.

While Finance Minister Michael Noonan introduced some incentives in the budget to bolster the market, economists believe it will be 2013 before prices start to pick up.

“Even allowing for the Budget 2012 initiatives to boost the property market, as well as lower interest rates from the European Central Bank, the short-term risks to house prices remain to the downside in our view,” said Alan McQuaid, chief economist at Bloxham Stockbroers.

“We now think the average fall this year will be around 13pc followed by another 8pc decline next year, and it will be 2013 at the earliest before prices start to pick up.

“Dublin house prices are likely to lead the recovery when it does come given that the capital has the biggest concentration of people.

“But, the reality is that Ireland’s banks, faced earlier this year with a fresh €24bn bill to bolster their balance sheets, are currently focused on raising capital and selling assets rather than expanding their mortgage books.”