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Property prices in Ireland still falling with little sign of recovery, report shows

There is no sign of recovery in the market with prices continuing to fall, the new ESRI House Price Index end of year review shows. Average prices fell 3.6% in December, more than previous months. Prices were down 3.1% in November, 1.8% in October and 1.1% in September.

The full year decline of 18.5% compares to a reduction of 9.1% in 2008, the index also shows. The average price for a house nationally in December 2009 was €213,183, compared with €261,573 in December 2008 and a peak of €311,078 in February 2007. ‘Last year was a horrendous one for the Irish housing market with a combination of shattered confidence, significant oversupply and a weakening economy combining in a vicious circle,’ said Niall O’Grady, General Manager Business Strategy, permanent tsb.
‘The figures deteriorated as the year progressed with an 8.5% reduction in average prices in the fourth quarter, more than twice the pace of decline of any other quarter since the fall commenced,’ he added.

Regarding the outlook for 2010, he refused to be drawn. ‘The pessimist will say there’s worse to come. The optimist will argue that affordability has improved so much that things will stabilise soon. But the realist will say we’ll have to wait and see,’ said O’Grady.
The detailed figures show that in Dublin house prices fell by 4.3% in December while there was a reduction of 2.5% for houses outside Dublin. This compares with price falls of 0.4% and 2.6% respectively in November.

Overall in 2009 prices fell 20.6% in Dublin and 15.3% outside Dublin. The equivalent rates in 2008 were reductions of 11.7% and 10.2% respectively.

The average price for a house in Dublin in December 2009 was €278,767 and €189,643 outside the capital city. The equivalent prices in December 2008 were €351,096 and €223,984.