Fall in house prices slowed last month

The rate of decline in house prices slowed in November, according to new data published yesterday. Values dipped by 1.1 per cent last month compared to 1.3 per cent in October.

However, prices are now 5.9 per cent lower than the same time last year, knocking more than €18,000 off the price of the average home in the State. Such a property now costs €292,124.

The Permanent TSB/ESRI house price index for November indicates that existing homes have suffered the brunt of the fall this year. While the price of new homes has slipped by 3.6 per cent in the 12 months to November, the equivalent figure for existing property is 8.8 per cent. Values in Dublin have fallen faster than elsewhere - with a home in the capital now worth 5.6 per cent less on average than the same time last year.

The average property price in the city was €403,233 last month compared to €251,839 for homes elsewhere, 5.5 per cent weaker than in November 2006.

Niall O'Grady, head of marketing at Permanent TSB said the latest figures were "pretty much in line with expectations.

"While the picture differs from sector to sector, the reality is that demand is sluggish and potential purchasers appear to be delaying their decision while the market settles." He pointed to increasing rent levels as a sign that a "significant pool of potential purchasers" was waiting for the right time to purchase.

One area to see an acceleration in the downturn was the commuter counties of Louth, Meath, Kildare and Wicklow, which saw prices weaken by 0.5 per cent last month compared to just 0.1 per cent in October. That means prices in these counties have fallen by 6.5 per cent in the past year.

Prices of three-bed semi-detached homes actually rose last month, according to the survey. It reported a 0.4 per cent increase in the cost of such properties to €303,651, just 2.2 per cent weaker than in November 2006.

The survey comes too early to take account of stamp duty changes announced in the Budget. In any event, there is generally a six- to eight-week time lag between the figures in the survey, which refer to mortgage drawdowns, and the actual prices being achieved on the market.

On that basis, it could be February before the first impact of the revised stamp duty arrangements emerges.