Average house price drops 16% in past 12 months

Wed, Dec 21, 2011, 00:00

HOUSES PRICES across Ireland continued their precipitous decline last month and the collapse in the market is showing no sign of abating, according to figures published by the Central Statistics Office yesterday.

The new data indicates that the cost of an average home in the Republic has now fallen by almost 16 per cent in the year to the end of November.

The figures show the rate of decline actually accelerating this year when compared with a fall of 11.5 per cent which the CSO recorded in the 12 months to the end of November 2010.

Residential property prices across the State fell by an average of 15.6 per cent in the year to the end of November, which compares with an annual rate of decline of 15.1 per cent in the 12 months up to the end of November last year.

The rate of decline continues to increase with the CSO figures recording residential property prices falling by 1.5 per cent last month, compared with a decline of 1 per cent in November 2010.

The comprehensive index, which is now widely considered to be the benchmark of property prices, gives detailed data by type of property and by location.

The decline in prices is worst in Dublin where residential property prices fell by 1.4 per cent in November and are now 17.6 per cent lower than they were a year ago. While the cost of a Dublin house fell by 2.4 per cent in November and are 18.1 per cent lower when compared with a year earlier there was at least a glimmer of hope for apartment-owners in the city. They saw the value of their property increase by just under 5 per cent last month when compared with the previous month. Apartment prices are still down 16 per cent on what they were in November 2010 and, all told, the price of an average Dublin apartment is off almost 60 per cent compared with the height of the boom in 2007.

When houses are added to the mix, the average price of a residential property in Dublin at the height of the boom more than four years ago was €431,000. Last month the price stood at €207,000 – a fall of €224,000, or 52 per cent.

Outside of Dublin the price collapse since the bubble burst has been less severe and at the peak of the boom in February 2007 the average price of a property was €268,000 compared with €155,500 last month, a fall of 42 per cent.

Prices may rebound slightly next year if an effort to kick-start the moribund property market announced by Minister for Finance Michael Noonan is successful.

First-time buyers who buy next year will get relief of 25 per cent, an increase of 10 per cent over what had been proposed by the previous administration. People who buy their second or subsequent home next year will benefit from a 15 per cent rate of mortgage interest relief instead of 10 per cent, which had been proposed by the last government. From 2013 both reliefs will be scrapped.