Property prices keep plunging
THERE was further gloom for homeowners after property prices plunged again last month.
Prices have been diving now for almost four years. And there is no let-up in sight, with economists predicting prices will keep going down next year.
The average residential property has lost almost €150,000 in value since the peak and is now worth around €169,000, according to the latest gloomy figures.
Around €232,000 has been wiped off the value of houses and apartments in Dublin as the capital continues to suffer much sharper price declines than the rest of the country.
The new figures from the CSO also show that the annual rate of decline in prices jumped to 15.6pc in November.
Prices fell by 1.5pc last month and are now down 46pc from the peak of the market in early 2007, the official figures show.
The CSO only gives percentage changes, but analysts have calculated that the price of an average property is now just €169,000.
This is down from €314,000 when the property bubble was at its most inflated in February 2007.
Dublin property prices now average €199,325, down from €431,000 at the height of the boom.
And outside Dublin the average property has crashed in value to around €154,000, down from a peak value of €268,000.
House prices in the capital are now 52pc lower than peak levels compared with the rest of Ireland at 42pc.
Dublin prices fell by 2.4pc in the month of November and 18.1pc compared with a year earlier.
But apartment prices in the capital are dropping at an even faster rate. They are down 16pc in the past 12 months, and are now down 58pc from the peak.
It is estimated that half the almost 800,000 homeowners in the country now owe more on their mortgages than their homes are worth.
Alan McQuaid of Bloxham Stockbrokers said: "According to the latest Reuters survey of Irish economists, house prices are likely to continue falling for some time yet.
"The poll predicts that house prices will decline by a further 12.8pc on average in 2011, and 6.5pc in 2012.
He added that the measures announced this month in the Budget will help the property market, but won't stop property values falling.
"Even allowing for the Budget 2012 initiatives to boost the property market, as well as lower interest rates from the ECB, the short-term risks to house prices remain to the downside in our view.
"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."
At the start of this month Finance Minister Michael Noonan offered an incentive of higher mortgage tax relief for first-time buyers who buy before the end of next year.
And anyone who buys a property and keeps it for seven years will get a rebate on the capital- gains tax.
David McNamara of Davy Stockbrokers said: "While these measures are encouraging, house prices should continue to fall into 2012."