Irish house prices fall 24% since 2007

House prices nationally have lost almost a quarter of their value since the peak of the property market in early 2007, according to the latest permanent tsb/ESRI House Price Index.

It says prices fell 24 per cent between February 2007 and July this year and that current low interest rates and improved affordability were failing to entice buyers back into the market.

Niall O’Grady of permanent tsb said “customer confidence in the property market needs to improve before we can expect an increase in activity”.

During the first seven months of this year, house prices have fallen 8.7 per cent to bring the decline over the last 12 months to 12.5 per cent.

However, there is some evidence that the pace of decline may be easing as the 1.1 per cent decline in July was smaller than the reductions for each of the preceding three months.

The data also suggests that prices for properties in Dublin have fallen more sharply than the rest of the country.

Dublin house prices have fallen 17.1 per cent in the 12 months to July compared to a decline of 11.1 per cent for properties outside the capital.

In July the average price for a house in Dublin was €312,822, down from €351,096 last December. Over the same period, the average price for a property outside Dublin has fallen from €223,984 to €209,485 in July.

First-time buyers paid an average of €198,411 for a house in July, down over 19 per cent since the same month in 2008. Between January and July, properties aimed at this segment of the market have fallen in price by 11.5 per cent.

For second-time buyers, the average price paid was €275,894, a fall of 9.7 per cent.

Prices for new homes have fallen less sharply over the last year than existing houses, dropping 10.4 per cent compared to 12.9 per cent.

The decline in the volume of mortgage applications can be seen from the Irish Banking Federation PricewaterhouseCooper Mortgage Market Profile. In its latest quarterly report it found that 23,680 new mortgage loans were issued during the first six months of this year, with a total value of just over €4 billion.

During the comparable period in 2008, more than 63,600 new mortgages were issued with an overall value of €13.8 billion.

Figures released by the Central Bank today showed that net mortgage lending dropped by €71 million in July, meaning that for the fourth month in a row the amount repaid on outstanding mortgages was higher than new lending.