Wednesday, 22 September 2010

Irish House Price Drops Continue...

Sales activity continued to increase relative to last April and while this is certainly an encouraging sign, it is not at the same pace as experienced during the first four months of the year.

This survey is the most up to date and comprehensive indication of the state of the market, with sales estimates for each type of property ranging from new one bedroom apartments up to second-hand five bedroom detached houses.

At a national level the survey reveals that 55pc of agents reported an increase in sales activity since April, while 20pc reported a decrease — this compares to the results recorded in last April's survey that showed 71pc of agents recording an increase in sales activity since the beginning of the year versus 11pc recording a decrease.

This trend of a more moderate pace of activity compared to four months earlier is evident across all regions in the country.

Most sales activity is taking place in and around the bigger urban centres and is confined, mainly, to first-time buyers.

The survey finds signs that owner-occupiers are also beginning to move in some areas, in response to sales to first-time buyers. Activity is strongest in the South East, with 67pc of estate agents reporting an increase in sales activity versus 5pc reporting a decrease.

In Dublin, 63pc indicated an increase, while 9pc reported a decrease and in the Mid West 67pc reported an increase versus 23pc a decrease. In contrast, the survey suggested that sales activity had decreased over the last four months in the Border Region, where 28pc indicated an increase versus 40pc a decrease.

House prices nationwide continued to fall over last four months. The average price of a new home fell by a further 9pc and the average price of a second- hand home is down 8pc between April and the end of August.

Since the market peak in 2006, prices have declined 43pc for new homes and 44pc for second hand homes.

Across all of Dublin, prices fell by 5pc on average for new homes and 7pc for second-hand homes since last April bringing the decline from peak to 45pc and 47pc respectively. Prices are more resilient in the Mid West, where new home prices remained unchanged over the four months and second hand prices fell by 4pc, resulting in a drop from peak of 33pc and 32pc respectively.

The biggest adjustments in prices over the last four months occurred in the West where new homes fell by 14pc on average and the Mid East where second- hand prices fell by 13pc.

Figures for some types of property in some locations are higher in the August survey than they were last April. In such cases these latest August levels reflect how prices are stabilising and on this basis it is not unusual to see fluctuations of plus or minus 5pc during the months between surveys.

Readers should be careful against extrapolating that the higher price levels reflect a trend indicating a return to price growth.

Instead such changes are attributable to a re-adjustment of the data due to both increased activity and greater response rates in some areas since the April survey.

Report by Yvonne Hogan - Irish Independent

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