Drop in trade hits house survey

The Permanent TSB/ESRI house price index, one of the main barometers of activity in the Irish housing market, will no longer to be published on a monthly basis because of the dramatic fall-off in mortgage transactions.

In a further illustration of the collapse in the housing market, Permanent TSB said today the volume of mortgage transactions had declined so significantly in recent months that an accurate snapshot of trends could not obtained during the average monthly period.

Permanent TSB said its property price survey will now be published on a quarterly basis, with the first quarter figures for 2010 to be published in April.

A spokesman said the bank, in consultation with the ESRI, had come to the conclusion that it was important to have a reasonable amount of transactions to form an opinion, and the monthly trades were not providing a sufficient amount.

The latest survey indicated average prices in the Republic fell by almost 19 per cent last year to levels not seen since April 2003.

House prices have now fallen by 31.5 per cent since peaking in February 2007. The data published last month showed that the pace of property price declines escalated in 2009, with prices tumbling 18.5 per cent over the year compared to a fall of 9.1 per cent in 2008.

The rate at which houses lost their value quickened as 2009 progressed. In the fourth quarter of the year, a national price fall of 8.5 per cent was recorded, more than double the rate of decline in any quarter since the market turned.

Niall O’Grady, general manager of business strategy at Permanent TSB, described 2009 as a “horrendous year” for the Irish housing market.