House prices fall 2.6% in first half of year

House prices have dropped by 2.6 per cent since the start of the year, according to the latest Permanent Tsb/ESRI index published this morning.

In continuing signs of a slow-down in the property market, the index found the average price paid for a house in June was €1,561 less that the price in May, representing a 0.5 per cent decline in June.

This follows a reduction in national house prices of 0.8 per cent in May and April and 0.6 per cent in March.

The average price paid for a house nationally in June 2007 was €302,605, compared with €310,632 in December 2006. In the 12 months between June 2006 and June 2007, house prices rose by only 0.9 per cent.

Dublin house prices fell by 1.3 per cent in June, and there was a reduction in prices of 0.9 per cent for houses bought outside the capital. Over the first half of this year, prices declined by 2 per cent and 3.2 per cent respectively.

However, in the 12 months to the end of June, house prices in Dublin grew by 4.1 per cent while outside Dublin they fell by 0.4 per cent over the same period.

The average price paid for a house in Dublin and outside Dublin in June was €418,905 and €257,945 respectively. The equivalent prices in December 2006 were €427,343 and €266,339.

In the commuter counties of Louth, Meath, Kildare and Wicklow, house prices fell by 0.7 per cent in June, compared to growth of 0.3 per cent in May 2007.

During the first half of this year, prices fell by 3.9 per cent in these areas, while year-on-year growth to June was 0.9 per cent. This was lower than the 3 per cent growth recorded in the 12 months to May.

The average price of a house in the commuter counties in June was €330,712, down from €344,186 in December 2006.

House prices in June for first-time and second-time buyers declined by 0.9 per cent and 0.5 per cent respectively. The average price paid by a first-time buyer and a second-time buyer in June was €270,093 and €340,143 respectively. The equivalent prices in December 2006 were €279,003 and €349,213.

House prices for new houses were down by 0.7 per cent in June, while the price for existing houses decreased by 0.3 per cent.

Permanent tsb Head of Marketing Niall O'Grady said: "After a decade of exceptional growth, house prices have declined in the first six months of this year by 2.6 per cent.

"While specific cases can be found of higher declines and of some increases, this represents the actual national picture. The future will continue to be influenced by interest rate changes and local sentiment; however, on the whole, the market remains solid and is underpinned by the twin fundamentals of a strong economy and strong demographic growth."