Price of houses in Dublin down 49% from peak

 

HOUSE PRICES in Dublin have fallen by almost 49 per cent since the peak of the boom in February 2007, according to the Central Statistics Office.

Overall, residential property prices fell by 12.5 per cent in the year to July, the CSO said in its latest residential property price index.

The figures show that the annual fall in property prices increased by a half of 1 per cent, when the year to July 2010 was compared with the year to July 2011.

However, the monthly figures show residential prices fell by just 0.8 per cent in July this year, compared with a decline of 2.1 per cent recorded in June and a decline of 1.3 per cent in July of 2010.

In Dublin, residential prices in July remained the same as in June and when house prices were considered by themselves, prices actually rose in July by 0.3 per cent.

However, Dublin apartment prices continue to fall with a drop of 1.9 per cent recorded in July.

This brings the annual drop in apartment prices in the capital to 13.7 per cent when compared with the previous year.

In all, apartment prices in Dublin have fallen by just over 54 per cent since their peak level in February 2007.

The fall in residential property prices in the rest of the Republic, that is excluding Dublin, is 40 per cent since the peak.

The CSO, taking January 2005 as a base line at 100 points, said prices for residential property nationally fell to 75.1 points in July this year.

Considering houses by themselves the CSO said the index showed a drop from 105 points in January 2005 to 78.1 in July 2011.

Considering apartments by themselves the CSO said the index fell from 102.1 in January 2005 to 57.6 in July 2011.

The worst yearly fall in this residential property index nationally was in the 12 months to September 2009, when the fall was 20.5 per cent. Since then the rate of decline slowed to 11.1 per cent in the 12 months to September 2010, but the annual rate then rose steadily to 12.5 in July.

In Dublin the greatest fall in the “all residential properties” index was in the 12 months to June 2009, when it was 26.6 per cent.

The CSO said the index was “mix-adjusted to allow for the fact that different types of property are sold in different periods”. In order to smooth out short-term volatility the index is based on a three-month rolling average.

Meanwhile, in a commentary on the figures, Alan McQuaid, chief economist with Bloxham Stockbrokers, said that given weak labour market conditions and the continuing lack of available bank credit, it was hard to be optimistic on the prospects for the property market in the immediate future.

However, he was more optimistic in relation to house prices rising in the medium term.

“The bottom line is that the property market remains very ‘soft’ at the moment, and is likely to remain that way for some months to come. But looking further ahead, we think house prices should increase on a five-year view as the labour market improves.”

“That said, the level of any rise over the next few years is only likely to be in low single digits as banks adopt a more cautious stance to lending than in the Celtic Tiger era, interest rates return to ‘normal’ and the introduction of a property tax for ‘principal’ homes of residence all weigh negatively on the market.”

The full report is available on www.cso.ie