HOUSE PRICES are set to decline by a further 10 per cent, but the property market will show signs of recovery by year end according to the latest property barometer from MyHome.
The property website forecasts that the market will see some stabilisation towards the end of this year, with three-bedroom semis in Dublin among the first elements of the market to recover from the slump.
The apartment sector will be one of the last to stabilise, says MyHome, due to the vast oversupply in the market and weak demand.
Asking prices for homes in the capital dropped by just over 18 per cent in Dublin last year, while the figure nationally was 14.6 per cent, according to the report.
Meanwhile, the latest survey on house prices from PermanentTSB shows that house prices declined a further 3.6 per cent in December, brining the full year decline for 2009 to 18.5 per cent - twice the fall in 2008.
The decline is set to continue through much of 2010 according to MyHome, which anticipates a further 10 per cent drop in asking prices in the year ahead. However, it predicts that the market will begin to recover in the second half of the year.
Modest family homes will recover first, according to economist Paul Murgatroyd, a consultant to MyHome. “As a result of price falls in the three-bedroom semi market in the capital, and the subsequent narrowing of the gap between these prices and apartment prices, first-time buyers are already favouring the more traditional type of starter home.”
With plenty of supply in the second-hand market, new homes starts will also be well down on previous years. The report forecasts that just 11,000 new homes will be built this year, down from a peak of around 90,000.
First-time buyers are slowly returning to the market, says MyHome managing director Angela Keegan. “There is definitely a cohort of people, mainly first-time buyers, who have been taking a “wait and see approach. They now feel that prices are close to the bottom in some locations and as a result they are stepping up their property searches.”
