A lack of mortgage finance remains the biggest stumbling block for home buyers, according to the annual property report by the Society of Chartered Surveyors.
The report also found that pressure on office rents were continuing while sales of retail premises were “dead in the water” in 2011.
However, the 319 surveyors who took part in the report’s compilation said they were optimistic about the Dublin residential property market, forecasting that prices would stabilize this year as a result of a dearth of new urban developments.
The residential rental market had also “held its own”, with rents in certain parts of Dublin rising by between 5% and 7.5 according to the SCSI.
The annual survey found that house prices across Ireland continued to decline in 2011 but at a marginally slower rate than in 2010.
In Leinster, the average selling price for a second-hand semi-detached house with three bedrooms dropped by just under 17% in 2011 – compared to a decline of 17.1% in 2010 and 19.8% in 2009.
Munster saw a decline of 9.3% for the same house type while Connacht saw a drop of 15.2%.
Lack of access to money remains one of the biggest issues affecting the residential property market, according to Roland O’Connell, Vice President of the Society of Chartered Surveyors Ireland.
“Until we see the financial institutions lending to qualified buyers, we will not see a recovery in activity levels in the property market,” said O’Connell.
Confidence in the residential property market remained relatively weak in 2011 due to a mixture of uncertainty around the economic situation and a lack of access to finance, the Society said.
Surveyors also reported healthy sales of agricultural land or development land for agricultural purposes in Leinster and Munster. Prime farm land in Tipperary and Kildare was sold for between €10,000 and €12,000 per acre last year, compared to a national average of €8,600 per acre.
The report highlights what it calls the “suburbanisation of retail”, whereby out-of-town shopping centres are performing better than town centres. Lettings in the retail sector increasingly tend to be short term – between two and three years – with tenants insisting on significantly lower rents, shorter lease terms, break clauses, rent-free periods and turnover-based rents.
Respondents believe that State assets agency Nama, which controls a number of hotels, still has “unrealistic asking prices” for those properties.
The power of NAMA to “dictate and control” the property market was criticised in general, with some respondents believing it was preventing a normal market correction.
