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Hopeful signs on house prices

Has the housing market stabilised at last, after almost five years of constant bad news? For every positive sign, there is a doubt or reservation. But the first quarter of 2012 ended with figures that give some room for encouragement.

The most pessimistic forecast for house prices never exceeded a fall of 60pc.

We have now come close to reaching that figure. The average asking price for the first quarter of 2012 was €177,000. That was down 52pc on the peak average of €366,000 in mid-2007.

Other encouraging signs include an improvement in selling conditions. In Dublin, 40pc of properties are being sold within three months.

The total number of properties for sale, 54,000, is the lowest for four years.

However, it would be unwise to draw too-firm conclusions from these figures. There are large, regional variations.

A curious possibility has emerged -- the development of a two-tier market.

In this scenario, the Greater Dublin region would be the first to recover, at a notably higher speed than anywhere else in the country.

It is also unclear why prices should continue to fall in Cork while those in Galway rise.

But by far the biggest question hanging over the statistics is not discrepancies in prices.

There cannot be a true recovery until the banks start lending money again.

Of that, unfortunately, there is little sign. We need a real housing market, based on market principles.