House price falls accelerate as developers try to clear stock

The decline in house prices is accelerating due to deepening price cuts in the market as property developers try to clear existing stock, according to the latest Permanent TSB / ESRI house price index.

Average national house prices fell by 1.4 per cent in January. This compares to a 0.9 per cent fall in December.

Overall, property prices fell 9.8 per cent last year compared to a decline of 9.1 per cent in 2007.

The average price paid for a house nationally in January was €258,006, down from €261,573 in December 2008 and a peak of €311,078 in January 2007.

In Dublin, house prices fell by 1.4 per cent last month alone while there was a 0.6 per cent decline for property bought outside the capital.

Last year house prices fell 12.4 per cent in Dublin and by 9.9 per cent outside of the city.

The average price paid for a house in the capital in January was €346,274, down from €351,096 in the preceding month. Outside of Dublin, property prices fell from €223,984 in December to €222.649 in the first month of this year.

House prices in the commuter counties of Dublin fell by 0.6 per cent in January to €265,550 from €267,265 in December. For the year, house prices in the commuter belt declined 16.7 per cent, compared with a 16.8 per cent fall in the preceding 12 month period.

House prices for first-time buyers fell by 0.8 per cent last month to €222,371 from €224,153. For second-time buyers, prices declined by 1.9 per cent in January from €296,302 to €290,759.

For the year, house prices for first-time buyers were reduced by 13.5 per cent and by 8.9 per cent for second-time buyers. The equivalent rates in December 2008 were a fall of 14.0 per cent and 7.8 per cent respectively.

House prices for new and existing houses were reduced by 1.3 per cent in January. In December the relative price declines were 0.7 per cent and 1.4 per cent respectively.

New and second hand house prices fell by 9.0 per cent and 10.8 per cent respectively year-on-year to January 2009. The average price paid for a new house last motn was €263,000, down from €266,466 in December.

For second-hand houses, prices declined from €256,956 in December to €253, 584 last month.

The Permanent TSB / ESRI house price index is based on agreed sale prices and is calculated using data from mortgage drawdowns.