TWO NEW REPORTS on the state of Ireland’s property market, both released this morning, offer mixed messages on the state of house prices.
A quarterly report from Daft.ie suggests that the price of the average house fell by 1.4 per cent in the first quarter of this year, while rival site MyHome.ie said house prices had fallen by 7.2 per cent.
Daft.ie’s estimate said the 1.4 per cent drop was the smallest quarterly decline in prices since the market began to fall in 2007, while MyHome.ie said its estimate of a 7.2 per cent fall was the steepest decline in three years.
Daft.ie’s report said the website had noticed small increases in house prices in Dublin (4 per cent) and Galway (2.3 per cent), but that prices had fallen in Cork, Waterford and Limerick were all down. Properties outside the cities saw prices fall by an average of 2.2 per cent.
The report suggested the total number of properties for sale right now was 54,000, the lowest in four years – a figure which Daft.ie economist Ronan Lyons said indicated an increase in sales, when combined with other statistics showing an increase in the number of houses which sold within four months of going to market.
Nonetheless, it is unlikely that prices will stabilise nationally until there is a substantial increase in activity, which itself will require mortgage lending by banks.
MyHome.ie said prices in the capital were down by 7.5 per cent, with prices in Cork down by 6 per cent, and in Galway down by 4 per cent.
Its author Annette Hughes of DKM Economic Consultants said recent reports indicated that prices were set to fall by a further 10 to 15 per cent.
“With prices falling by around 2 per cent per month, this implies another 6 to 7 months of falling prices, before possibly stabilising in the second half of the year,” Hughes said.
However any move towards price stability in the latter half of 2012 will need to be accompanied by a recovery in the jobs market, the prospects for which are very weak over the coming months.
MyHome.ie director Angela Keegan said the median asking price for a 3-bedroom semi-detached house was now around €185,000, a figure equivalent to five times the average annual wage, and that this indicated prices were approaching sustainable levels.
UCC economist Seamus Coffey, commenting on the Daft.ie report, said measuring the price of property was “an art rather than a science”, and said the planned establishment of a national house price register later this year would help to deal with inconsistencies between private reports and those of the CSO.
He added that anecdotal evidence, which could not be verified, suggested that around 30 per cent of property transactions were being carried out in cash – leading to an overall estimate of 16,000 annual property sales.
This equates to an annual turnover rate of 0.8 per cent – a figure which indicated a distressed market, he said.
Disclosure: Daft Media Ltd and Journal Media Ltd, the publisher of this website, are both part of the Distilled Media group.