Skip to main content

More House Price Drops Ahead...

Price of homes 'to fall 23pc in two years'...


HOUSE prices here will fall by 13pc this year and a further 10pc in 2010, international credit ratings agency Standard & Poor's has predicted.

After suffering the sharpest price fall in Europe in the four years to 2010, Standard & Poor's (S&P) expects Irish prices to stabilise in 2011.

However, some Irish estate agents believe that much of these price fall predictions are already priced into current Irish house prices following a spate of house-price cuts by builders since the start of the year.

S&P is using the Permanent TSB (PTSB) house price index as its guide and this has been criticised by many estate agents, including Michael Grehan of Sherry FitzGerald and Keith Lowe of Douglas Newman Good, for being too late with its price trend calculations.

These agents reckon that Irish prices have fallen by between 35pc and 40pc from their 2007 peak but the PTSB index, because of the way it is calculated, has so far recorded a fall of only 20pc from peak.

Furthermore, S&P's 13pc price fall forecast for 2009 suggests that it expects the PTSB index to fall by only 27pc between its 2007 peak and the end of December this year. Consequently, agents now estimate that some of next year's S&P forecast may also be priced into prices currently being quoted by some developers.

In the meantime, S&P also estimates that Irish houses are currently more affordable than any other homes in the five housing markets surveyed, based on an OECD survey.

Affordability

One of the pluses from a buyer's perspective is that S&P highlights how affordability of Irish homes is the best of the five countries surveyed. On the negative side, it expects oversupply of Irish houses to continue to dampen the Irish market.

S&P refers to a Royal Institute of Chartered Surveyors survey showing an excess of 250,000 homes before the market downturn and how IBEC forecast that 100,000 migrant workers could leave the country this year "creating a severe slump in the buy-to-let market and in turn further depressing the market as a whole".

S&P expects France will be the only one of the five European countries to show a price increase next year while UK house prices will stabilise. Spanish prices are also expected to fall 10pc next year and 5pc in 2011.



Report by Donal Buckley - Irish Independent.

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu

Property Tycoon's Dolce Vita Ends...

Tycoon's dolce vita ends as art seized... THE Dublin city sheriff has seized an art collection and other valuables from the Ailesbury Road home of fallen property developer Bernard McNamara. The collection will be sold to help pay his debts. The sheriff, Brendan Walsh, is believed to have moved against the property developer within the past fortnight, calling to his salubrious Dublin 4 home acting on a court order to seize anything of value from his home to reimburse his creditors. The sheriff is believed to have taken paintings from the family home along with a small number of other items. The development marks a new low for Mr McNamara, once one of Ireland's richest men but who now owes €1.5bn . The property developer and former county councillor from Clare turned the building firm founded by his father Michael into one of the biggest in Ireland. He is the highest-profile former tycoon to date to be targeted by bailiffs, signalling just how far some of Ireland's billionai

I fear a very different kind of property crash

While 80% of people over 40 own their own home just a third of adults under 40 do. This is disastrous for social solidarity and cohesion Changing this system of policymaking requires a government to act in a way that may be uncomfortable for some. Governments have a horizon of no more than five years, and the housing issue requires long-term planning. The Department of Public Expenditure and Reform was intended to tackle some of these problems. According to its website its remit is to “drive the delivery of better public services, living standards and infrastructure for the people of Ireland by enhancing governance, building capacity and delivering effectively”. So how is the challenge of delivering homes for people in 2024 and beyond going to be met? The extent of the problem is visible in the move by companies, including Ryanair, to buy properties to house staff. Ryanair has, justifiably, defended its right to do so. IPAV has long articulated its views on how to improve supply an