Oct 3, 2011 - 00:10

MyHome.ie Property Barometer Q3 2011

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Asking prices decline 3.2% in Q3 2011
Average asking price nationally is now €241K - 42% down on peak
Prices of 3 bed semis in some Border and Midland counties show steep falls but some signs of prices stabilising in other micro markets
'Euro financial crisis casting shadow on economic prospects while housing market remains exceptionally weak.'
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Monday 3rd October 2011.The trend of steady falls in asking prices has continued into the third quarter of 2011with the latest figures from leading property website MyHome.ie showing prices are down 42% from their peak level in 2006. In Dublin they are down 48% from peak levels.
In Quarter 3 the average mix-adjusted asking price for properties fell by 3.2% nationally and by 3.8% in Dublin. The annual rate of decline nationally is 13.8% while in Dublin the corresponding figure is 15.2%.
Based on average mix-adjusted asking prices, the average price for a home nationally is now €241K as opposed to €249K, 3 months ago. In Dublin the corresponding figures are €275 versus €286K. The average price of a second hand home is €243K down 3.3%.
The author of the report, Annette Hughes, Director DKM Economic Consultants said cautious consumer sentiment is contributing to low housing activity levels, while the euro financial crisis is casting a shadow on economic prospects.
‘Although there was some positive economic news in Q2, Irish consumers remain cautious due to international and domestic concerns. On the one hand they are worried about the euro financial crisis and its impact on economic and employment growth prospects, while on the other they are concerned about household finances as well as continuing difficulties securing mortgage finance. But uncertainty around the contents of the forthcoming budget is the current big issue for households’ Hughes said.
‘For now these issues appear to be outweighing positive news from the Irish economy and the prospect of lower interest rates in the near future. As a result the downward price trend we have seen over the last five years looks set to continue for the remainder of 2011’ Hughes added.
Angela Keegan Managing Director of MyHome.ie said that while some issues remained outside our control it was vital the right calls were made on the Budget, on the proposed NAMA initiative and on addressing the issue of securing mortgage finance.
‘These are issues within our control and if addressed properly will help us work through the overhang of unsold stock in the country and ensure we return to a normalised market as quickly as possible. The fact there has been a number of successful auctions recently is a positive, as is the lower percentage price fall for new homes. The average price of a new home is now €232K, down less than 1.5% over Q3. So affordability is improving all the time. The same applies to apartments where prices are down by an average of 4.4%’ Keegan said.
Keegan noted that alongside falling prices the other clear trend to emerge in the survey was the ongoing fragmentation of the housing market into a series of regional or micro markets.
‘The prices of 3 bed semis fell by around 10% in Monaghan, Westmeath and Offaly during Q3. In contrast prices showed no change in Donegal, Leitrim and Mayo while they fell by under 1% in Galway, Limerick, Kerry, Cork, Wicklow and Kildare. This shows that local factors are coming into play more and more’ Keegan said.
Cork city recorded the largest quarterly rate of decline in Q3 at 5.9% with the median price of a property in the city falling to €225K, down from €239K. Galway saw a fall of 3% down to €227,500 a fall of €3K while prices in Limerick remained unchanged at €185K.
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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 down¬wards. 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.