Business Property & Mortgages

Monday 18 December 2017

Price drop ruins hopes of stability in housing market

Charlie Weston Personal Finance Editor

PROPERTY prices fell last month, dashing hopes that the market was close to stabilising.

The fall of 1.1pc in prices in June reversed a rise that was recorded in the previous month.

Prices are now down 50pc from the peak. And hopes that price falls were coming to an end in Dublin have taken a knock with a drop in house and apartment prices in the capital, according to the Central Statistics Office (CSO).

The latest falls indicate that the average home is now priced at €156,000, having collapsed to half of its value since the boom.

This country has suffered one of the worst house price collapses in the Western world.

And the figures for a fall of 50pc in house prices are an average -- rural parts of the country are seeing very few transactions with little demand for houses, while family type homes in parts of Dublin with good services are reported to be selling. In the 12-month period up to June prices fell by 14.4pc nationally, the CSO said.

Prices across the country had risen marginally in May, which was the first monthly rise since 2007.

Reversing

Despite price rises in Dublin in March and May, the new figures show June prices fell 1pc.

House prices are down 56pc in the capital, with apartment prices having fallen 62pc since the peak. Residential property prices in the rest of Ireland are 47pc lower than the peak.

Calculations based on the CSO figures indicate that the average property in Dublin is now about €185,000, a loss of €246,000 from the peak.

Outside Dublin, the average property is selling for €142,000, down from €268,000 in 2007.

The CSO percentage figures do not take account of cash sales, which account for up to a third of property transactions, according to housing experts.

The Central Bank and the Economic and Social Research Institute (ESRI) indicated recently that the housing market may be close to the bottom.

Economist with Merrion Stockbrokers Alan McQuaid said house prices were likely to keep falling as the jobless rate was now close to 15pc. "We don't see a major improvement in the housing market until there is clear evidence that the jobless rate has peaked and is on a downward trend.

"However, the annual rates of decline in house prices should continue to ease in the coming months," he said.

But Marian Finnegan, chief economist with estate agents Sherry FitzGerald, said they were seeing signs of stability within the capital.

Irish Independent

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business