House prices down 24% from peak

HOUSE PRICES nationally have lost almost a quarter of their value since the peak of the property market in early 2007, according to the latest Permanent TSB/ESRI House Price Index.

It says prices fell 24 per cent between February 2007 and July this year and that current low interest rates and improved affordability were failing to entice buyers back into the market.

Niall O’Grady of Permanent TSB said “customer confidence in the property market needs to improve before we can expect an increase in activity”.

During the first seven months of this year, house prices dropped 8.7 per cent to bring the decline over the last year to 12.5 per cent.

However, there is some evidence that the pace of decline may be easing as the 1.1 per cent decline in July was smaller than the reductions for each of the preceding three months.

The data also suggests that prices for properties in Dublin have fallen more sharply than the rest of the country.

Prices for Dublin houses have fallen 17.1 per cent in the 12 months to July compared to a decline of 11.1 per cent for those outside the capital.

In July, the average price for a house in Dublin was €312,822, down from €351,096 last December.

Over the same period, average prices for a property outside Dublin have fallen from €223,984 to €209,485 in July.

First-time buyers paid an average of €198,411 for a house in July, down 19 per cent since the same month in 2008.

Price falls for second-time buyers have been less severe with an annual decline of 9.7 per cent and an average price of €275,894.

New home prices have fallen less sharply over the last year than existing houses, dropping 10.4 per cent compared to 12.9 per cent.

The decline in the volume of mortgage applications this year can be seen from the Irish Banking Federation PricewaterhouseCooper mortgage market profile.

In its latest quarterly report, it found that 23,680 new mortgage loans were issued during the first six months of this year, with a total value of just over €4 billion.

During the comparable period in 2008, more than 63,600 new mortgages were issued with an overall value of €13.8 billion.