FROM THE ARCHIVES:The average price of a new house in the autumn of 1982 was £34,712 and of a second-hand house £31,364, both down on the previous quarter, and the property market was still in decline, according to a regular survey conducted by
The Irish Timesand summarised in this report by Bill Murdoch.
– JOE JOYCE
HOUSE PRICES are continuing to fall, despite the decline in interest rates and the greater availability of house loans. Agricultural land remains depressed and commercial property is in the doldrums. This depressing view of the property market has emerged from the latest poll, carried out by the Royal Institution of Chartered Surveyors in conjunction with The Irish Times.
House prices were fairly buoyant up to autumn 1981 but since then they have been exceptionally weak. The latest poll, carried out in December 1982, shows that the downward trend is continuing. Of those polled, 57 per cent said house prices were falling compared with 43 per cent in August and 41 per cent in April. Apart from a decline in real incomes, the residential market had to contend with high interest rates and a drop in the availability of house loans for most of 1982. Also, political and economic uncertainties introduced a hesitancy into the market. [. . .]
Since then, interest rates have fallen and building society mortgages have become more freely available. Building society mortgage interest rates were cut from 16.25 per cent in September to 14.75 per cent in October and they were further reduced to 13 per cent in December. Also, the interest on personal overdrafts fell by 2.75 per cent to 16.75 per cent in the last six months of 1982. So at least the cost of financing the purchase of a house is cheaper.
This probably accounts for the 5 per cent of the firms polled which felt that house prices were rising in December compared with nil in August. [. . .] Apart from the continued decline in real incomes, the market will have to contend with the proposed tax on property valued in excess of £65,000 whose owner(s) have an income of more than £20,000. This property tax is bound to inhibit the sale of the more expensive houses. [. . .]
The latest poll is the 12th and, apart from showing the trends in the residential property market, it also indicates that agricultural land remains very depressed. [. . .]
Ever since the dizzy days of the late sixties when some parcels of agricultural land reached £4,500 an acre – the average high was in the region of £2,600 – this sector has been on the decline. At its height, the land prices could never have been sustained and when the collapse came it was severe. By the end of 1981 the average prices for an acre had dropped to £1,400 and since then it has weakened further.
But what about the future? RICS says that there is an increase in confidence within the farming community which the surveyors attribute to an upturn in agricultural incomes together with a recognition that land prices may have bottomed out.
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