House prices continue to decline

Average national house prices fell by 1.3 per cent last month and have declined 10.9 per cent in the year to the end of May, according to the latest permanent tsb/ESRI House Price Index.

In the first five months of 2009 national house prices fell by 6.2 per cent, compared to a reduction of 4.4 per cent for the same period a year ago.

The average price paid for a house nationally in May €245,295, as against €261,573 at the end of last year and a peak of €311,078 in February 2007.

"Ongoing low demand combined with a significant overhang of properties for sale continues to drive prices down, particularly in segments such as first time buyers and houses in Dublin," said Niall O'Grady, general manager business strategy, permanent tsb

"Any improvements in affordability due to lower prices and lower interest rates will likely be ignored until economic confidence returns," he added.

House prices in Dublin fell by 2.2 per cent last month, compared to a decline of 1.1 per cent in April. Outside of the capital, prices fell by 0.4 per cent in May as against a 1.7 per cent fall a month earlier.

Over the year, house prices fell by 14.8 per cent in Dublin and 10.5 per cent outside the capital.

In the first five months of 2009 alone prices in Dublin declined 7.7 per cent and by 4.7 per cent elsewhere.

The average price paid for a house the capital last month was €324,973 compared to €351,096 at the end of 2008.

Outside of Dublin, the average price declined from €233,984 in December to 213,491 in May.

In the commuter counties of Louth, Meath, Kildare and Wicklow, where house prices have bee particularly hard hit, the average cost of purchasing a home fell by 0.6 per cent last month to €252,811 compared to €267, 265 at the end of last year.

Over the 12 months to the end of May, house prices in the commuter counties fell by 17.6 per cent.

House prices for first-time buyers declined 1.4 per cent last month, compared to a fall of 4.1 per cent in April.

Over the year, house prices for first-time buyers fell 17.4 per cent and in the first five months of 2009 alone were down 9.2 per cent.

The average price paid by a first-time buyer in May €203,560 as against €224,153 in December 2008.

New house prices declined 2.1 per cent last month to €244,586, compared to EUR266,466 at the end of last year.