Residential property prices down 13% on last year
NATIONAL RESIDENTIAL property prices fell by 13.6 per cent in the year to July but rose by 0.2 per cent in the month.
This compares with an annual rate of decline of 14.4 per cent in June and a decline of 12.5 per cent in the 12 months to July of last year.
The slight rise in property prices in the month of July compares with a drop of 1.1 per cent in June and a decline of 0.8 per cent in July 2011, according to the residential property price index published by the Central Statistics Office yesterday.
In Dublin, residential prices fell by 0.3 per cent in July and were 16.6 per cent lower than a year ago.
House prices in the capital were down 0.2 per cent in the month and were 16.7 per cent lower than a year earlier.
Apartment prices were 19.6 per cent lower compared with July 2011.
Residential property prices in the rest of Ireland (excluding Dublin) were up 0.3 per cent in July compared with a drop of 1.3 per cent in July of last year. Prices were 12.1 per cent lower than in that month.
House prices in the capital are now 56 per cent lower than at their highest level in early 2007, while apartment prices are some 63 per cent lower.
Residential property prices in Dublin are 57 per cent lower than at their highest level in February 2007.
In the rest of Ireland, the decline in the price of residential property since that time is 47 per cent, while overall the national index is 50 per cent lower than at its height in 2007.
Davy chief economist Conall Mac Coille said the data reflected transactions in the first half of 2012. New mortgage lending had hit a fresh low of just €974 million, well down on the €1.26 billion in the same period last year.
Prices reflected a “dysfunctional market”, with a very low level of transactions, particularly in rural areas.
Davy said anecdotal evidence suggested cash purchases accounted for up to 40 per cent of transactions, given weak lending, and that a lack of supply had supported prices in the Dublin area.
The firm noted census data that showed the number of households with a mortgage and in unemployment had increased from 14,757 in 2006 to 50,792 in 2011.
“We retain our view that repossessions will have to rise and, coupled with weak mortgage lending and a slow recovery in the economy, house prices will fall further.”
Merrion Economics said it did not see a major improvement in the housing market until there was clear evidence that Ireland’s jobless rate had peaked and was on a sustained downward trend.
“Furthermore, the uncertainty of how a proposed property tax will be calculated is also likely to weigh negatively on house sales/ prices in the run-up to December’s budget.”
KBC chief economist Austin Hughes said it was far too early to make any definitive judgment, but the broad picture emerging was one of a “tentative stabilisation”.
“There is a consistent message across a range of domestic economic indicators that things have stopped getting worse, though that doesn’t mean there will be a dramatic turnaround.”
Property website MyHome.ie, which is owned by The Irish Times, said it was “a little surprised” at the figures, adding that a cautious approach should be adopted when analysing them.
“The new property register, which will record actual transaction prices, is due to go live next month and that is a very welcome development,” said Myhome.iemanaging director Angela Keegan.
Aoife Brennan, head of research at Lisney, said she was not surprised at a monthly decrease in the Dublin index.
For some time, the agency had believed the CSO index was “lagging the market” by about six months.
“Consequently, we believe that the CSO index is under-playing the fall in residential prices.”
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