Thursday 12 December 2019

'House prices falling' claim absurd, says estate agent

Charlie Weston Personal Finance Editor

ESTATE agents have reacted with dismay and some scepticism to figures showing a new fall in house prices – with one firm going as far as describing them as "absurd".

The drop in prices of 0.5pc in December bucked what appeared to be the emergence of slowly rising prices.

In Dublin, prices were down 1.3pc in the month, according to the Central Statistics Office (CSO). The price of residential property was unchanged in the rest of the country.

Prices are now down 50pc from the peak in 2007.

In 2012 as a whole, prices fell 4.5pc – one of the lowest changes in a number of years. Prices rose or were flat in six of the 12 months of last year, the CSO said.

The December fall is surprising, given strong demand from first-time buyers to get mortgage tax relief, which was withdrawn at the end of last month.

The average price of a house nationally is now estimated to be €160,000. Dublin prices average €190,000, with those outside the capital coming in at about €145,000.

Estate agency Lisney dismissed the December figures as "absurd". It claimed they were out of line with what was happening on the ground, particularly in Dublin.

Head of research Aoife Brennan said: "The declines are due to how the index is constructed." The CSO does not include cash transactions, which Lisney said were responsible for 45pc of deals. And, the figures are based on mortgage drawdowns, which reflect property deals struck a number of months ago.

Goodbody's Dermot O'Leary said the figures come as data from the property price register show a 33pc rise in the number of transactions last year compared with the previous year.

Prices have now risen in four out of the past six months, according to the CSO data.

Mr O'Leary said the scrapping of mortgage tax relief meant many people brought forward decisions to buy. "This will continue to distort activity in the first quarter of 2013."

But what he called the underlying stabilisation will continue this year.

Department of Finance figures reveal a 57pc rise in the number of buyers qualifying for mortgage tax relief to 3,017 in the last three months of last year when compared with the July to September period.

Contradict

Yesterday's CSO figures appear to contradict data from estate agency Douglas Newman Good earlier this week, which showed that the price of second-hand houses in Dublin were up 2.2pc last year.

Earlier this month an international ratings agency said prices could fall another 20pc, but Merrion Stockbrokers' Alan McQuaid said any fall this year is likely to be in the low single digits.

Meanwhile, an international survey of house prices has concluded that values here have almost returned to normal affordability, following the housing bubble.

Yesterday's 'Demographia International Housing Affordability Survey: 2013' found that it takes 3.6 times gross household earnings to buy a property in Dublin, but just 2.5 times in Waterford.

The survey says a price of three times gross earnings is affordable.

Irish Independent

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