PROPERTY prices to fall 45 per cent, one of this week’s headlines read; property prices have fallen 70 to 80 per cent, said another. And just last week, the ESRI/Permanent TSB reported that prices were down 24.4 per cent “from the peak in February 2007”.
Confused? Yes, especially if you didn’t take in that international ratings agency Fitch’s warnings of a 45 per cent drop in Irish property prices related to the fall from a peak, which it said was in December 2006. And exasperated, if like estate agent Ian Finnegan of Finnegan Menton, you’re well aware that prices have already fallen by as much as 50 per cent. Since when? “Mid-2006,” says Finnegan, which he identifies as the real peak.
Most in the industry agree with him: MyHome’s property consultant Paul Murgatroyd reckons prices have already fallen by an average of 40 per cent and have another 10 per cent or so more to fall before the market hits bottom – probably in the second half of 2010.
Indeed, so do economists. Professor John FitzGerald doesn’t dispute that the ESRI/Permanent TSB’s figures lag behind but points out that the ESRI’s quarterly economic commentary (out last week) predicts that the fall from a peak (in February 2007) to trough (sometime in 2010) may ultimately reach 50 per cent.
Economist (and Irish Timescolumnist) Pat McArdle says prices will eventually be "down by 45 per cent" by the time the market reaches bottom.
So there seems to be general agreement that Fitch was accurate, even conservative in predicting a peak-to-trough fall of 45 per cent in residential property prices. (The 80 per cent fall relates mainly to commercial prices).
But could price falls be worse than that, given all the hardship to come (rising unemployment, a swingeing budget, etc)?
Sherry FitzGerald economist Marian Finnegan – who reports a 44 per cent fall in Dublin prices to date, a 39 per cent fall countrywide – says values have “a little bit more to fall before stabilising in 2010”.
We asked doomsday – but so far accurate – UCD economist Morgan Kelly to tell us what he thought. But he wouldn’t say. “I don’t do soundbites,” he told us.
