Residential property prices in Ireland fell 10.8% in 2010 and the outlook for this year is subdued with low sales volumes and a weak-lending market.
Prices are now down 38% decrease for their peak at the end 2006, according to figures from the latest permanent tsb/ESRI House Price Index. But there are signs that the decline in prices is slowing.
While the rate of decline in average house prices in Ireland rose in the final quarter of 2010 compared to the previous quarter, the rate of decline for the year as a whole was significantly less than what was seen in 2009, the index also shows.
National property prices in Ireland fell by 3.5% in the fourth quarter of 2010 on top of 1.3% decline in the third quarter of the year. The annual fall of 10.8% compares with a decline of 18.5% in 2009 and a year on year decline of 14.8% to the end of the third quarter of 2010.
The average price for a house nationally in the fourth quarter of 2010 was €191,776, compared with €215,086 in the fourth quarter 2009 and €311,078 at the peak of the market.
In Dublin, house prices fell by 0.6% in the fourth quarter of 2010 following a 1.2% fall in the third quarter and a 3.5% fall in the second quarter.
The year on year fall for Dublin houses was 15.1%, less than the fall of 23.4% in 2009 and a year on year decline of 21.0% to the end of the third quarter of 2010. The average price for a Dublin house in the fourth quarter was €237,480, compared with €238,986 in the third quarter.
House prices Outside Dublin fell by 2.9% in the fourth quarter of 2010. This compares to a 1.2% fall in the third quarter and 0.8% in the second quarter.
The annual reduction in 2010 was 8.1%, compared to 15.6% in 2009 and a year on year decline of 11.2% to the end of the third quarter of 2010. The average price for a house Outside Dublin in the fourth quarter was €174,570, compared with €179,721 in the third quarter of 2010.
‘With low transaction volumes, continuing price declines and a sluggish economy, the outlook is for a very subdued property and mortgage market in 2011,’ said Niall O’ Grady, general manager with permanent tsb.
He also pointed out that the permanent tsb house price index is based on the agreed sale price and is calculated using data from mortgage draw downs and there is no data on volume change from month to month and the data is based on Permanent TSB transactions, which may not be representative of the whole market. For example the plunge in high priced houses and the large number of poorly constructed apartments may not be reflected in the index.
In the fourth quarter for example, the sample was likely very small and consequently would have distorted the result.