Property prices continue decline

Property prices continued to decline in May, falling by 1.2 per cent compared to April and 12.2 per cent over the year.

Nationally, prices have now fallen an average of 41 per cent from the peak recorded in 2007.

The Central Statistics Office said residential prices in Dublin rose by 0.4 per cent in May, moderating the annual decline to 11.5 per cent. House prices in the county were 0.3 per cent higher in the month, and 10.9 per cent lower than a year ago.

That compares to a decline of 2.1 per cent for residential properties in the rest of the country during the month of May, and 12.5 per cent year on year.

The price of apartments, meanwhile, was 0.3 per lower in Dublin last month, and down 14.8 per cent compared to May 2010.

House prices in Dublin have fallen by almost 46 per cent from their peak in early 2007. Prices for apartments in the region are 53 per cent lower.

"Property price declines in Dublin have been more reflective of where we expect the national average to fall," said NCB chief economist Brian Devine.

"The dichotomy between apartment prices and house prices is evident in the monthly data and this is something we would expect to continue throughout the country, especially in Dublin where house building (actual houses) was not dramatic relative to overall building. Nonetheless, we would still expect that house prices will also continue downwards in Dublin albeit for a shorter period and depth than for apartments."

Since the peak of the property boom, residential properties in the rest of Ireland have fallen by 38 per cent.

Bloxham chief economist Alan McQuaid said the weak labour market conditions and the continuing lack of available bank credit made it difficult to be optimistic on the prospects for the property market in the immediate future.

"The bottom line is that the property market remains very 'soft' at the moment," he said. "But looking further ahead, we think house prices should increase on a five-year view as the labour market returns to normal. That said, the level of any rise over the next few years is only likely to be in single digits as banks adopt a more cautious stance to lending than in the 'Celtic Tiger' era, interest rates return to 'normal' and the likely introduction of a property tax for 'principal' homes of residence all weigh negatively on the market."