Property prices plummet 15.1% in past 12 months

HOUSE prices fell last month at their fastest rate for two-and-a-half years.

In further signs that the crash has yet to bottom out, average property prices are down 15.1% in the last year, the largest annual decline since March 2010.

The housing index from the Central Statistics Office also show the cost of a home is now 45% cheaper than the peak in early 2007.

A breakdown of the property market reveals that average prices in Dublin are down 51% while outside the capital the fall is 42%.

The collapse has hit apartments harder, with values down 60% in the last four-and-a-half years. The fall of 2.2% in average property prices in October is the largest monthly drop since April 2009.

In Dublin, residential property prices fell 3.1% in October and were 17.5% lower than a year ago. House prices fell 3.2% last month and were down 17.1% on an annual basis.

The price of residential properties in the rest of Ireland fell 2% in October compared with a decline of 1.2% in the same period last year. Year-on-year prices were down 13.8%.

The figures come just days after Central Bank data found nearly 100,000 mortgages are in distress, with arrears exceeding €1 billion.

According to the latest Reuters survey of Irish economists, house prices will fall a further 12% on average in 2011 and 6% in 2012. Bloxham chief economist Alan McQuaid said it would be 2013 before any improvement in the property market was likely.

“Even allowing for the new initiative by NAMA to offer a limited amount of mortgages with protection against price falls, as well as lower interest rates from the European Central Bank, the short-term risks to house prices remain to the downside in our view,” he said.

“Following these latest figures we now think the average fall this year will be around 14% followed by another 9% decline next year, and it will be 2013 before prices start to pick up.”

David McNamara of Davy Research said the figures, coupled with last week’s arrears numbers, suggest there would “no let up in the property market slump” in the immediate future.

“Central Bank figures released last Friday indicated that mortgage arrears over 90 days had increased to 8.1%. Today’s release suggests that the rate of decline in property prices is accelerating, although the level of transactions is likely to have remained weak,” he said.