Property prices fall to 2002 levels

House prices in Dublin continue to fall at a steeper rate than those in the rest of the country, the latest data shows.

The Permanent TSB/Economic and Social Research Institute (ESRI) house price index shows prices in Dublin fell by 3.5 per cent in the second quarter of 2010 compared to 0.8 per cent reduction outside the capital.

House prices in Dublin declined 24.6 per cent in the 12 months to the end of the June, compared to a fall of 14 per cent in the rest of the country.

The average price for a Dublin house at the end of June was €242,000, compared with €250,872 at the end of the first quarter of 2010.

The average price for a house outside Dublin at the end of June was €181,820, compared with €183,309 at the end of the previous quarter.

The survey showed average national house prices in the Republic fell by 1.7 per cent in the three months from April to June of this year, the lowest quarterly reduction since the second quarter of 2008.

The survey, which is now conducted quarterly rather than monthly because of the fall-off in transactions, indicated house prices have fallen 6.4 per cent since the start of the year, and 35 per cent since their peak at the end of 2006.

Average national prices are now at 2002 levels, the study said.

The average price for a house at the end of June was €201,364, compared with €242,593 at the end of the second quarter last year, and €311,078 at their peak in 2006.

Permanent TSB’s Niall O’Grady said: “While prices continue to fall at different levels in Dublin versus the rest of the country, this reduction in the second quarter is the lowest recorded quarterly fall in almost two years.

“This may indicate that prices are starting to find a more sustainable level after almost three and a half years of decline,” he said.

Brian Devine of NCB Stockbrokers said:“Anecdotally, the general perception is that prices are in fact down somewhere in the region of 40- 45 per cent.”

“This may not be too far off the bottom. In fact, under certain assumptions it is even rational to purchase at current prices given the costs of renting,” he said.

“The relative attractiveness of buying versus renting is also another swing factor in indicating that a bottom may not be too far off. The conclusion is that the final peak to trough price decline is likely to be in the region of 45-55 per cent in nominal terms,” he said.