MyHome.ie NCB Property Barometer Q3 2007

• 0.7% national decrease in last Quarter (July-Sept2007)
• Biggest drops in Dublin with 1.7% decrease
• National Asking Prices still up 34% since the end of 2004
• Download the latest MyHome.ie/NCB Property Barometer:
  • Introduction (204 kb)
  • Market Commentary & Analysis (1.1 mb)
  • Barometer Index (275 kb)
  • Full Report (3.8 mb)

Asking prices for residential property have dropped by -0.7% nationally over the last Quarter, according to the MyHome.ie NCB Property Barometer published today.
The MyHome.ie NCB Barometer, based on an analysis of all properties advertised on MyHome.ie over the period, shows the sharpest price drops in Dublin of -1.7% but national asking prices are still running 34% ahead of 3 years ago when the series began despite the recent slowdown in the property market.
A breakdown of Asking Price reductions shows drops of -0.7% at national level, -1.7% in Dublin and -0.3% in the Rest of Country. Drops of -0.7% and -0.3% were recorded for second-hand and new properties respectively. The Barometer Report shows significant variations in price trends across different regions and property types.
An analysis of recent price trends in 3 bedroom semi-detached houses shows a fall of -0.6% in Dublin over the last Quarter, with a -2.3% drop in Dublin West and a -1.5% drop in the Commuter counties of Louth, Meath, Kildare and Wicklow. Leinster (excl Dublin) showed a fall of -1.6% in 3 bed semis over the quarter and an overall fall of -5.5% from the 2006 price peak.
The MyHome.ie database contains more than two-thirds of all residential properties for sale in Ireland. The Report was based on an independent analysis of the data and commentary by NCB.
NCB economist, Eunan King says "The Report shows that asking prices are generally falling but in our view the Irish housing market is well underpinned because underlying demand remains strong, supported by strong population growth in the over 25 age groups. Moreover, interest rates seem likely to have peaked though there may not be cut any time soon. The big problem in the market since the mid-1990s had been that demand exceeded supply and this led to sustained house price inflation. Now supply would appear to have finally caught up with demand."
Referring to the impact of the changes to stamp duty, Eunan King continued: "The stamp duty issue has added to uncertainty and this has been ongoing for most the last twelve months. Stamp duty was not as much of an obstacle to activity in the market when prices were rising, because of the perception that one year's house price inflation would recoup most of the tax paid. That perception does not hold in a stable or falling market and may impede activity at the margin."
The Report includes a four-page, county-by-county guide providing details of price trends for the most popular property types on sale. Most counties show a drop in prices for 3 bed semis in the last quarter with the sharpest fall of 6% in Leitrim whereas some counties such as Kerry have recorded an increase (+5%) in Asking Prices in the period.
Jim Miley, Chief Executive of MyHome.ie, said the Report shows that the market is still in a period of adjustment from the boom years of the last decade. "The market has moved from a position where most houses were selling for well in excess of the Asking Price to one where the Asking Price is at the top end of market expectations. A further moderation in sellers's price expectations may be required to make Asking Prices more closely aligned with actual sale prices."
The Report also puts the spotlight on a number of areas and analyses key price movements and the changes in the 'price premium' trends in one area over another over the last three years. Among the key findings are:

• The 'price premium' or gap for 3 bedroom semi-detached houses in Dublin compared with the Commuter counties of Louth, Meath, Kildare and Wicklow grew from €100,000 3 years ago to €200,000 at the end of 2005 and is now back to €160,000
• The 'price premium' of 3 bed semis in Dublin West V Navan has grown from €30,000 at the end of 2004 to €100,000 now
• The 'price premium of 3 bed semis in Leinster (excl Dublin) V Munster has dropped from €34,000 at the peak to just €15,000 in the last quarter.

These figures indicate that the greatest level of price adjustments are taking place in those areas which experienced the steepest price rises in earlier years.