Property prices now down 51pc from peak of boom
HOUSE prices across the country are now worth less than half of their value during the property boom, according to the latest price survey.
The Sherry FitzGerald price index shows that average prices for second-hand homes nationally have fallen to 51.1pc of their highest value during the peak of the housing boom in 2006.
Prices have dropped even further in the capital with the average second-hand home in Dublin now worth almost 56pc less than in 2006.
The stark figures released yesterday reveal that the value of houses across Ireland is now back at early 2002 levels.
At a comparative level it means prices -- especially in the Dublin market -- are now the same as they were 20 years ago.
The grim news comes on the same day that banking stress tests released by the Central Bank yesterday predict the four leading banks will need an injection of €24bn in capital to offset future losses.
Among the predictions are that they stand to lose close to €9.5bn in residential mortgage loans alone over the next three years.
And according to the latest house price index for the first quarter of 2011, house prices are continuing to fall.
Prices have now dropped by 12.5pc in the past 12 months in the capital and by 13.2pc nationally between the end of March 2010 and 2011.
Marian Finnegan, chief economist for the Sherry FitzGerald Group, said the lack of consumer confidence and the lack of access to bank credit are the main drivers of the downward price spiral.
"The pace of price deflation remained quite strong in the opening quarter of the year, a reflection of the negative consumer sentiment, concerns surrounding the wider economy and the interest rate cycle," she said.
"Looking to the year ahead, there is no doubt that the market will remain challenging in the coming months as consumers digest the income tax implications of the Budget together with a rising interest rate environment.
"The greatest obstacle for all markets in the year ahead lies in the availability of credit. As previously stated, true stability will only be achieved with a normalisation of the credit flow in the economy."
But there is some light on the horizon for first-time buyers, she added.
"We're not an over-inflated market any more," she said.