Property prices fall 6% in Q2, says Daft

Asking prices for residential properties fell by 6 per cent in the three months to the end of June, according to property website Daft.ie.

Buyer confidence saw the sharpest drop in almost 2 years last month due to a tightening of mortgage lending criteria and concerns over the economy, according to the latest Daft House Price report.

Over the last 12 months asking prices have fallen 7.9 per cent and average asking prices of €324,000 are now lower than any point since May 2006.

According to the report, the most striking finding is the "very sharp reduction in activity in the market" in the second quarter bringing the number of unsold properties 70,000.

Despite this, many sellers retain unrealistic price expectations, often listing their property at a higher price than those already in the market in their area, the report says.

This trend is most pronounced in South County Dublin where properties are listed for sale with an asking price €60,000 higher than those already on the market in the area.

Although asking prices declined in every county last month, Dublin, its commuter counties and parts of Connacht and Ulster saw the sharpest falls.

The most severely affected counties were Monaghan and Sligo with drops of 11.8 per cent and 12.8 per cent respectively, while in Offaly, Louth and Cavan prices have fallen just under 10 per cent. Asking prices for Limerick property have held up relatively well over the year with just a 1.6 per cent fall.

Fergal O'Brien, senior economist at Ibec says commuting distance was emerging as a key factor for future house prices.

"With oil prices close to $150 a barrel and pump prices in Ireland hitting record highs, I suspect that many prospective and current property owners are reassessing the costs and benefits of long-term commuting.

"Falling house prices in commuter areas is likely to become more evident in Ireland over the coming years as economic and quality of life factors discourage long-term commuting trends."