House prices fall back to 2004 levels, index shows

HOUSE PRICES have fallen back to 2004 levels, according to the latest Permanent TSB/ESRI House Price Index.

Average national house prices fell by 1.3 per cent last month and have declined 10.9 per cent in the year to the end of May, according to the index.

In the first five months of 2009, national house prices fell by 6.2 per cent.

The average price paid for a house in May was €245,295, as against €261,573 at the end of last year and a peak of €311,078 in February 2007.

“Ongoing low demand combined with a significant overhang of properties for sale continues to drive prices down, particularly in segments such as first-time buyers and houses in Dublin,” said Niall O’Grady, general manager business strategy, Permanent TSB

“Any improvements in affordability due to lower prices and lower interest rates will likely be ignored until economic confidence returns,” he added.

House prices in Dublin fell by 2.2 per cent last month compared to a decline of 1.1 per cent in April.

The average price paid for a house the capital last month was €324,973 compared to €351,096 at the end of 2008.

Over the year, house prices fell by 14.8 per cent in Dublin and 10.5 per cent outside the capital. In the first five months of 2009 prices in Dublin declined 7.7 per cent and by 4.7 per cent elsewhere.

Outside of Dublin, the average price declined from €233,984 in December to €213,491 in May.

The rate of decline in house prices in the commuter counties of Louth, Meath, Kildare and Wicklow slowed down in May, with the average cost of buying a home falling by 0.6 per cent last month compared to a fall of 1.4per cent in April.

The average price of a house in the commuter counties in May was €252, 811. Over the 12 months to the end of May house prices in the commuter counties have fallen by 17.6 per cent.

The rate of decline in house prices for first-time buyers also slowed down in May.

House prices for first-time buyers declined 1.4 per cent last month, compared to a fall of 4.1 per cent in April.

Over the year house prices for first-time buyers fell 17.4 per cent and in the first five months of 2009 alone were down 9.2 per cent. The average price paid by a first-time buyer in May was €203,560 as against €224,153 in December 2008.