But with prices in Dublin creeping up 0.4% in May it is the first sign of recovery in Ireland’s battered property market, the figures from the Central Statistics Office indicate.
While Dublin saw an increase, overall residential property prices fell by 1.2% in May. This follows a 1% fall in prices in April. And although the increase in Dublin is good news analysts warn against taking just one month’s figures out of context.
The longer term picture is still one of decline. In Dublin overall prices are still 11.5% lower than a year ago. Apartments have not fared so well, falling 0.3% in May and now 14.8% lower than a year ago.
The price of residential properties in the rest of Ireland fell by 2.1% in May compared with a decline of 1.2% in the same month of last year and prices are now 12.5% lower than in May 2010.
A comparison with the peak of the market in early 2007 shows that prices in Dublin are almost 46% lower while apartments in Dublin are 53% lower than they were in February 2007. The fall in the price of residential properties in the rest of Ireland is somewhat lower at 38%. Overall, the national index is 41% lower than its highest level in 2007.
While statisticians warned that the Dublin price pick up could not be taken as a trend, economists said prices in the capital could be close to bottoming out. Some believe that the rise is evidence of a two speed housing market emerging, with Dublin likely to recover well ahead of the rest of the country.
Average house prices nationwide were about €178,000, down €133,000 from the peak. In Dublin, prices have collapsed by €200,000 on average, with the typical house now costing about €227,000.
Some believe, however that prices could fall even further. KBC Bank's Austin Hughes said the new figures were ‘tentative’ evidence of a bottoming out in Dublin house prices that contrasts with greater weakness in the property market outside the capital.
He stressed it may be premature to talk of a turnaround in the Dublin property market, but that prices in the capital had fallen more than elsewhere.
Greater employment opportunities around the capital would support an earlier turnaround than in other areas, Hughes added.
And the oversupply of much demanded three bedroom, semi detached houses was less pronounced in Dublin.
However, estate agents have warned that house prices in the capital have fallen more sharply than indicated in the CSO survey, up to 54%. A two bedroom apartment in Clontarf recently sold for €131,000, a 74% drop on what the same unit sold for in 2006.
