Jul 12, 2011 - 15:46

MyHome.ie Property Barometer Q2 2011

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Asking prices decline another 4% in Q2 2011
The average asking price nationally is now €249K - 40% down on peak
Prices of new homes now back at 2001 level
Prices for 1 bed apartments fell by up to €10K in last 3 months
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Monday 4th July 2011. The steady decline in asking prices has continued into the second quarter of 2011with the latest figures from leading property website MyHome.ie showing prices are down 40% from their peak level in 2006. In Dublin they are down 46% from peak levels.
In quarter two the average mix adjusted asking price for houses fell by 4% nationally and 5.2% in Dublin. The annual rate of decline nationally is 14.4% while in Dublin the corresponding figure is 15.7%. Based on average mix-adjusted asking prices, the average price for a home nationally is now €249K as opposed to €260K 3 months ago. In Dublin the corresponding figures are €286 versus €302K.
Asking prices are now down just under 8% nationally in the first six months of the year while the pace of decline in Dublin has accelerated to 8.8%. The annual rate of decline in Dublin has been a steady 15 to 16% and this looks set to continue this year.
The author of the report, Annette Hughes, Director DKM Economic Consultants said the reductions in asking prices during Q2 are disappointing but not entirely surprising. ‘At the moment our best hope for 2011 is that some moderation in the rate of decline in asking prices will begin to emerge over the second half of the year. While the worst of the recession is over, serious challenges remain. Significantly lower demand and difficulties accessing mortgage credit are adversely impacting on the market. The absence of any firm evidence that property prices have bottomed out combined with concerns about imminent interest rate rises, spending cuts and new taxes and charges appear to be making consumers reluctant to make major purchases’ Hughes said.
Angela Keegan Managing Director of MyHome.ie said any recovery in the housing market would depend on a range of wider economic issues including employment growth. ‘Clearly consumer uncertainty is discouraging buyers from availing of the greater affordability which clearly exists. Our figures indicate that the national asking price for a new home now stands at €235K – down just 0.6% in the quarter, the lowest decline since 2008. This means prices are now back at levels last seen a decade ago’ Keegan said.
While one bed apartments dropped by up to €10K nationally Keegan noted that the price of 3 bed semis in Limerick and the price of 4 bed semis in several counties in Leinster showed signs of stabilisation. ‘The prices of 4 bed semis actually rose in counties Kilkenny, Westmeath, Longford, and Wicklow while the median price of a 3 bed semi in Limerick remained the same at €175K, indicating asking prices may be bottoming out at that level. The figures from around the country underline the fact that the market is fragmenting into a number of micro markets dependant on a range of local factors.’ Keegan concluded.
Prices in Galway city fell by 1.9% while in Cork the fall was also considerably less than the national figure with a fall of 2.4%.
The median asking price in Cork is now €239K, down €6K, in Galway its €234,500 down €4,500 while in Limerick its €185K down €10K.
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Ends.
For Further Information
Contact Kieran Garry,
Gordon MRM,
01-6650455 or 087-2368366
Note to Editor
Asking prices versus transaction prices: During the boom period when prices (and incomes) were rising and the number of buyers exceeded the number of sellers, transactions prices would have been significantly higher than asking prices, whereas now in recessionary times, asking prices are typically what vendors aspire to. As the market has adjusted downwards over the past four years and transactions have plummeted, asking prices have also had to adjust downwards. In today’s market characterised by oversupply in some locations and a lack of mortgage finance, transactions prices tend to be below asking prices as what buyers are willing to pay or can afford is much lower now than during the boom years. The gap should narrow, however, as sellers become more realistic and as the demand / supply balance is addressed.