More price cuts as season starts

There will be a drop in the supply of houses new to the market in 2009, but sellers are still having to cut prices - again

THE DUBLIN property market has opened with price cuts at all levels of the market, as sellers digest news of the country's deteriorating finances and economists' gloomy forecasts.

Estate agents are taking a fresh look at their stock and advising sellers to reconsider prices. The reassessment is going on at all levels of the market, according to Peter Kenny of Colliers, where notable price cuts include €130,000 off a three-bedroom penthouse in a development at Old Conna, Riverdale, on Dargle Road, Bray, Co Wicklow. The 130sq m (1,400 sq ft) apartment with river views has has been reduced from €560,000 to €430,000.

Colliers has also dropped the price of a four-bedroom semi at Burnaby Mill in Greystones from €720,000 to €580,000 in an effort to attract buyers, while in Dún Laoghaire, Gunne has just dropped the price of an attractive three-bedroom semi with good gardens at 39 Highthorn Park from €700,000 to €660,000.

At other end of the price scale, Colliers has slashed €2 million from the price of a large detached house at 9 Temple Villas in Rathmines. The six-bedroom redbrick had been on the market since last May, priced at €10 million. At Christmas the vendors agreed to drop the price to €8 million.

Some economists have predicted that Irish house prices have considerably further to fall in 2009, but according to Sherry FitzGerald, house prices have already dropped by as much as 40 to 50 per cent since the peak of 2006, with the greatest fall off in values occuring at the upper end of the market.

The average price of a second-hand property in Ireland fell by 7.1 per cent during the final quarter of 2008, according to a report by the agency earlier this week. "This brings the level of price deflation for 2008 to 18.1 per cent - the highest level of price deflation ever recorded in the Irish market," says the company's chief economist, Marian Finnegan.

The results for the Dublin market are even more marked with price reductions of 7.8 per cent in the fourth quarter and 20.1 per cent in the year. The combination of this dramatic price reduction and the 1.75 per cent interest rate cutover the past six months has had a very positive impact on the affordability of property, a factor which bodes well for enhanced activity levels in the weeks and months ahead," says Finnegan.

Still, she says, activity levels in the coming weeks will be be "subdued" as consumers begin digesting the impact of the price correction and mortgage rate reductions along with continuing bad news on the economic front.

For the Dublin market, larger family homes are unlikely to see significant further correction with price reductions of 40-50 per cent already realised and supply levels now tightening, says Sherry FitzGerald. The agency has cut prices in the first week of business to stimulate interest. In Dalkey, Co dublin, Inishowen, a large five-bedroom family home on Knocknacree Road with spectacular views across Dublin Bay, is now priced at €2.175 million, down from €3 million last February.

Across the city in Castleknock, Dublin 15, features like a swimming pool and sauna have not been enough to sell Huntington, a lavish five-bedroom redbrick on Outfarm Lane for sale through Newcombe Estates. Sales agent John Newcombe has just dropped the price from €4.5 million to €2.9 million to tempt would-be buyers.