Property price crash is now in full swing
New figures show sales down 20%
WE ARE now in a full-blown property crash, with new house sales down 4 per cent, second hand sales down between 15-20 per cent since the start of the year, house repossessions soaring and the government doing nothing to stop it.
Finance Minister Brian Cowen and the Taoiseach Bertie Ahern continue to ignore calls for further stamp duty reform in the budget, while the property market, which has been the life blood of our booming economy, has not just hit the rocks but is sinking fast.
News came on Friday that house prices since the beginning of the year are down almost 4 per cent, with that figure centred mainly on the new housing market.
According to the latest Permanent TSB/ESRI house price index, house prices fell for the seventh month in a row and have now dropped by 3.4 per cent since January 1st.
More alarmingly, however, sales in the second hand market are down in the region of 15-20 per cent at best and in some areas the situation is even worse than that.
Since the slowdown began, politicians have dithered as the market became gripped by uncertainty and bereft of confidence.
Coupled with this inactivity have been the successive interest rate hikes -- felt hardest by those on 100 per cent mortgages.
Peter Wyse, Of Wyse Estate Agents -- whose company has three offices in the Dublin area -- is among those who have let staff go as a result of the slowdown.
Speaking to the Sunday Independent, Mr Wyse said: "This penal system of stamp duty is overtly anti-family. It is like a giant condom preventing people from having more children, because they can't afford to trade up to a bigger house. Stamp duty has created a minor recession on its own."
Mr Wyse said that Brian Cowen must now introduce more realistic bands, and cap the maximum at 5 per cent.
"People must be encouraged, not discouraged from moving up the ladder without the fear of overextending themselves," said Mr Whyte.
He also put into context how poorly the market is for agencies, like his own, which operate primarily in the second hand market.
"Things are dead, they aren't moving in the slightest. Something needs to be done. We are now advising people who are looking to sell their houses to let them in the meantime, as it's now taking 3-6 months to sell the house, it's totally now a buyer's market."
The slump from 93,000 house completions last year to just 60,000 expected next year is reflected in the greatly reduced growth forecasts, already revised downwards three times this year.
Last week, we revealed that Brian Cowen had met with some of the country's largest developers -- also big Fianna Fail donors -- who are deeply anxious about the market.
They called on the Tanaiste to introduce further stamp duty reform. Mr Cowen however -- who only allowed the first phase of Stamp Duty reform under pressure from Taoiseach Bertie Ahern -- is still reluctant to do so.
Last month, in one two-hour session, more than 45 repossession cases were heard or adjourned in the High Court. On that occasion, the court ordered the repossession of family homes in Dublin, Galway, Limerick and Sligo.
In one day last week, meanwhile, the court received 17 new repossession applications. Senior judge Mr Justice John Hedigan, meanwhile, told a series of banks and lending institutions that it was, "not a great time for selling properties".