House prices have continued to fall amid growing economic uncertainty, with the Dublin housing market experiencing the biggest drop in prices, a new report shows.
The latest Permanent TSB/Esri house price index indicates house prices fell by 1.2 per cent last month, and that the first five months of 2008 showed a reduction of 4.4 per cent, while year on year the rate is 9.5 per cent.
The survey found houses prices in Dublin fell by 1.6 per cent in May compared to a 0.9 per cent drop in April.
In the first five months of 2007, house prices in Dublin declined 4.3 per cent.
House prices outside of Dublin fell 0.8 per cent during during May versus a 0.8 per cent decline in April. For the first five months of the year, house prices outside of the capital dropped 4.4 per cent.
Niall O’Grady, general manager business strategy at Permanent TSB, said the combination of higher customer mortgage rates and weaker confidence in the economy has increased uncertainty about the immediate future of the property market, resulting in lower demand.
The average price paid for a house nationally in May was €275,176, compared with €287,887 in December 2007.
Today’s figures demonstrate a continuing trend in falling house prices since the beginning of the year.
House prices for first-time buyers were reduced by 1.2 per cent, with the average price paid by a first-time buyer at €246,925 in May compared with €260,786 in December last year.
The average price paid for a new house in May was €276,215, while the price for a second-hand house was €274,716.
Houses in the commuter counties of Louth, Meath, Kildare and Wicklow showed a slight slowdown in the reduction. Prices fell by 0.9 per cent in May compared to 1.5 per cent in April.
Overall, however, prices in the commuter belt fell by 4.6 per cent in the first five months of the year compared to 3.3 per cent last year. A year-on-year reduction to May of 7.9 per cent compares with 6.8 per cent over the 12 months to April.