Irish residential prices still falling but outlook for 2011 more positive, new report shows

The latest fall brings the total decline from the peak of the market in late 2006 to almost 32.4%, the Property Barometer issued by property website, MyHome, shows.
 
The average asking price for a home nationally is now €280, 000 compared to €291, 000 three months ago and €323,000 12 months ago.
 
In Dublin, asking prices overall fell by 4.3%, bringing the total fall over the last 12 months to just under 16%. Prices in the capital have now fallen by 39% since their peak. The average asking price for a house in Dublin now stands at €325, 000, down from €340,000 in the second quarter of the year and €386,000 a year ago.
 
The survey shows that the prices for new homes fell by 1.9%, less than half the fall recorded by second hand homes which fell by 4.3%. In both previous quarters new homes fell by substantially more than second hand homes. The average price of a new home now stands at €255,000 while that of a second hand home is €283,000.
 
Limerick city, which recorded a price fall of 7.3% last quarter, saw prices easing somewhat this quarter with a fall of 3.4%. The median asking price in Limerick is €215,000. Limerick has had a total fall of 24.6% from the peak of the market, the urban area with the smallest total decline.
 
In Cork the median price fell by 3.6% to €265,000, while in Galway the fall was 3.7% giving a median price of €255,000. At the peak of the market the median price in Galway was €450,000 and since then prices have fallen over 43%, the most dramatic fall recorded in urban areas.
 
The author of the report, Jean Goggin, an economic consultant with DKM Economic Consultants said that the data suggests that the property price decline in 2010 is unlikely to exceed the magnitude of decline experienced in 2009 but that we will have to see an improvement in the labour market and the general economy before the property market picks up.
 
‘Last year the overall decline was 14.5% and so far this year the annual decline is 13%. While this suggests some improvement in property market conditions it is clear that we have not yet reached the bottom of the market,’ said Goggin.
 
‘However 2011 is likely to bring some improvement in the general economic climate which should boost consumer confidence and provide more certainty to households regarding employment and incomes. We could then see a modest improvement in some segments of the market’ he added.
 
Angela Keegan, managing director of MyHome, said the survey showed prices were continuing to decline, albeit at a lower rate compared to the same period last year.
 
‘It was interesting to note that the price of new homes fell at half the rate of second hand homes and this levelling in prices may be due to sizable price reductions sellers made to new homes earlier this year. The sharp price falls recorded in many of the capital’s commuter counties such as Wicklow, Meath and Kildare are not surprising given the rapid increase in unemployment and its implications for housing demand in these areas,’ she said.
 
‘We know there are buyers out there, a lot of them with mortgage approval, but until consumer sentiment improves they will continue to stay on the sidelines. For now all eyes will be on the budget. The good news for anyone contemplating buying a home is that properties have never been as affordable,’ she added.