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Not-so-happy new year: House prices still dropping as January begins

Two new reports show the property market continued its decline right up to the end of 2011, with few signs of an immediate recovery.
Jan 3rd 2012, 7:15 AM 2,903 15

HOUSE PRICES ARE continuing their marathon fall as the new year begins, according to two new reports.

Both sets of figures for the last quarter of 2011 from property websites and showed multi-point drops in prices. Overall in 2011, house prices fell by at least 13 per cent nationwide and 14.3 per cent in Dublin.

However, there were some significant differences between the two reports. Data from suggested asking prices were falling less quickly than previously, with a quarterly mix-adjusted drop of 2.4 per cent nationwide – the lowest in two and a half years.

Conversely, figures showed the fastest three-month drop in prices yet recorded – a staggering 7.7 per cent between September and December 2011.The biggest fall was recorded in Galway, where asking prices dropped by more than 14 per cent in just three months.

According to the same data, the average asking price nationwide is now €175,000 – a 52 per cent fall from the 2007 peak of €366,000.

Angela Keegan, managing director of, said that measures announced in the Budget would help boost confidence and lead to increasing “price stability”.

“Affordability continues to improve all the time,” she said. “A lot of the uncertainty which was out there before the Budget has been removed. Unfortunately uncertainty over the future of the Euro and economic growth remains and this continues to sap consumer confidence.”

However, economist Ronan Lyons said that it was a low number of transactions, rather than prices, which was hampering the property market.

He said Government confidence-boosting measures were “really only whispering in one ear [of the banks], while it’s effectively shouting at banks in the other ear not to lend” with stress tests and enforced low interest rates. He added:

We have to get back to a sustainable lending environment, so that the banks are encouraged to lend at sustainable rates and also a significant amount of mortgages. It’s only when we see that happening that we will see a recovery in activity and also a stabilisation in prices.

More: Have a spare €50m? You could buy this Kildare estate at a knockdown price>

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Michael Freeman


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