No sign of recovery in housing market

THERE will be no recovery in the housing market, which has seen prices plunge by almost 50% from their peak, until the economy shows signs of improvement, according to experts.

In Cork, prices are down by just over 12% in the last 12 months, while in Dublin prices have fallen by more than 50% from their peak, according to Sherry FitzGerald.

The average price of a second-hand property in Dublin fell by 2% in the third quarter of the year, bringing the total drop to just over 11% in the 12 months to the end of September.

Nationally, the average price of a second-hand house in Ireland fell by 2.7% in the third quarter, similar to quarters one and two, bringing the total drop to almost 12% in the 12 months to September.

The Cork market saw prices fall by 3.6% in the third quarter.

From the peak of the market, house prices nationally are down 45.9%, bringing prices back to levels achieved in quarter four of 2002.

In July, 53,900 units were available for sale nationwide, 7,049 of which were in Dublin, according to Sherry Fitzgerald.

First-time buyers remain the most active cohort in the market, accounting for 51% of the properties traded in the year to date.

Chief economist with Sherry FitzGerald Marian Finnegan said: “There is no doubt that the correction in prices has been severe, yet if one can find a positive in the figures it is that the pace of correction has eased notably. There is now a greater alignment between asking and achieved prices and a notable tightening in the quantity of properties for sale in the market.”

She said the new homes market remains relatively quiet. “This market awaits the full transfer of loans to NAMA and the re-capitalisation of the banking sector so that decisions on marketing strategies and pricing of units can be more consistently made,” said Ms Finnegan.

However, MyHome.ie said the market has not yet bottomed out. It said the average cost of a home is €280,000 from €323,000 a year ago.

Jean Goggin from DKM Economic Consultants said prices will only stop falling when the unemployment crisis eases and the economy turns around.

She said there could be a modest improvement in some segments next year.

According to Daft.ie, the total stock on the market has been close to 60,000 for over two years.

“Nonetheless, there are properties selling. Of the 5,000 properties listed for sale during April, about two in five have now sold,” said Daft.ie economist Ronan Lyons.