Residential property prices continued to fall in October, declining by 2.2 per cent in the month, new data from the Central Statistics Office showed today.
In the year to October, property prices have dropped by an average of 15.1 per cent throughout Ireland, picking up the pace from September, when a fall of 14.3 per cent was recorded.
Home prices in Dublin have been more severely affected, falling by 3.1 per cent last month and 17.5 per cent over the year. House prices in the capital dipped by 3.2 per cent in the month, while apartment prices were 2.3 per cent lower.
Over the year, house prices declined 17.1 per cent, while apartments were 21.2 per cent lower compared with the same period in 2010.
The rest of the country saw an overall fall in residential property prices of 2 per cent in October, and 13.8 per cent over the year.
Property prices have now fallen 45 per cent since their peak in early 2007.
A recent survey of economist by Reuters predicted that house prices would continue to decline for some time, with a 6 per cent fall in 2012.
“Even allowing for the new initiative by Nama to offer a limited amount of mortgages with protection against price falls, as well as lower interest rates from the European Central Bank, the short-term risks to house prices remain to the downside in our view,” Bloxham economist Alan McQuaid said in a note today.
He predicted an average fall of around 14 per cent for 2011, with a 9 per cent decline next year before prices start to pick up in 2013.
“Dublin house prices are likely to lead the recovery when it does come given that the capital has the biggest concentration of people. But, the reality is that Ireland’s banks, recently faced with a fresh €24 billion bill to bolster their balance sheets, are currently focused on raising capital and selling assets rather than expanding their mortgage books,” he said.
Any price rises in the next few years are likely to be in the low single digits as banks are more cautious about lending, interest rates return to “normal” and a property tax is introduced, he said.
Chief economist with Goodbody Stockbrokers Dermot O'Leary said home prices were officially back to mid-2000 levels.
"It is likely that increased price discovery over recent months due to high-profile property auctions has increased transparency in the property market, leading to lower prices," he wrote in a note. "However, as we learned last week in the mortgage statistics, liquidity in the market remains very low, with mortgage transactions set to fall to the lowest level since 1971 this year. Access to mortgage credit is a prerequisite for stabilisation in prices."
