House prices fall 1.2% in 2008 - survey

House prices fell nationally during the first three months of the year, according to a report from property website Daft.ie.

Nationally the fall in prices over the first three months of 2008 was 1.2%

Nationally, the fall in prices over the first three months is 1.2 per cent, although certain areas such as Wicklow and south county Dublin saw sharper drops, with prices down by up to 7 per cent.

The Daft House Price Report also found prices were down by 5 per cent on average in Cork and by 2.4 per cent in Limerick.

The price variations show strong regional differences. Galway city, where prices dropped sharply in the final quarter of 2007, saw an increase in asking prices of 1.2 per cent during the start of this year.

Other parts of the country where prices are flat or rising include counties Kerry, Waterford and Cork.

According to Ronan Lyons, economist with Daft.ie, the data suggests sellers have started to accept the housing slowdown may be prolonged and are reducing prices to attract buyers.

This compares with the final quarter of 2007 when prices appeared static but sellers were in fact accepting offers below the asking price.

Dermot O'Leary, chief economist at Goodbody Stockbrokers, said the number of properties for sale will be a key indicator of the property market over the coming months.

"Figures indicate that the total number of properties for sale stands over 50 per cent ahead of last year's levels. Prices won't begin to stabilise again until the stock for sale begins to fall more normal levels."

Just 20 per cent of Dublin properties put on the market since January 2007 remain unsold, he added. However, in Connacht and Ulster the figure is almost one in two, suggesting the house price correction will take longer in these areas.

Over the weekend, Central Bank governor John Hurley said house prices are returning to realistic levels.