Tuesday, 7 July 2009

House Prices Plummet...

House prices fall 20pc but owners still battling to sell...

THE average asking price of a house in Ireland has plummeted by almost 20pc over the past year, a new survey has revealed.

And asking prices for residential property in Dublin's city centre have been slashed by almost a third, compared to the same period 12 months ago.

A report by property website reveals that asking prices for residential property fell almost 6pc nationwide in the second quarter of the year, a significantly larger drop than in the first three months and in line with falls in late 2008.

Dublin continues to be worst affected by tumbling house prices
-- the average price tag on a home in the capital is 27pc lower than the 2007 peak, while prices for city centre houses have fallen by 34pc.

During April, May and June of this year, homes in the city centre fell a further 11pc, compared to a 4pc drop for houses in Cork, 6pc in Limerick and a fall of just over 2pc for homes in Galway and Waterford cities.

The report confirms a continued sluggishness in the market, with most homes taking more than six months to sell.

The average time on market for residential sales properties is now over seven months, compared with only six weeks during the boom.

However, analysts said buyers were beginning to respond to smaller price tags.

"The large price drops we have seen in Dublin over the past year appear to have had an effect on the level of transactions in the capital," said economist Ronan Lyons.

"Over the past three months, the percentage of properties coming off the market in Dublin has risen steadily, suggesting that if properties are priced correctly, they will sell."

Oliver Gilvarry, head of research at Dolmen Stockbrokers, said the continued decline in the property market reflected the decline in Irish economic conditions.


He added that he believed the worst of the crisis was behind us, although economic growth would remain weak for a number of years.

"The collapse of the housing market will also result in a large number of social issues that must be faced by the Government," Mr Gilvarry said.

In particular, falling house prices have resulted in large numbers of owners facing negative equity. A recent estimate suggested that 340,000 people were in this position.

Mr Gilvarry noted that couples may remain trapped in family-unfriendly apartments because they can't afford to move to larger homes.

"These type of situations highlight the need to prevent residential property bubbles in the future," he said.

According to the report, the average asking price nationally in June was €263,000, similar to levels in February 2005, and almost one-fifth below what the same house would have fetched this time last year.

Outside Dublin, drops in house prices were lowest in Munster, down 15-20pc on 2007 peak levels, while Leinster, Connacht and Ulster homes have experienced a 25pc drop since their 2007 peak

Report by Grainne Cunningham - Irish Independent

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