House prices in the in Greater Dublin area have dropped by 64.7% since 2006, according to the latest results from the Douglas Newman Good House Price Gauge.
This drop in value was also mirrored in the organisations 2011 House Price Gauge which recorded a fourth-quarter average price fall of 5.3%, bringing the total annual price fall to 19.95%.
As part of its analysis for 2011, the organisation also commissioned an independent assessment of house prices by Dermot O’Leary, chief economist with Goodbody Stockbrokers, in which he stated that a 60% price drop would be an “appropriate level” of price falls for Ireland.
This is based on a comparison with average property prices and income ratios in the UK and yield analysis.
Access to finance continues to be a issue with DNG estimating that one in every three buyers is deemed to be a cash buyer and the company believes this trend towards cash transactions will continue as buyers find it difficult to secure mortages.
DNG also carried out an analysis of the National Housing Survey produced by the Department of the Environment during which it noted that the number of completed vacant units nationally has dropped by 20% in the past year.
In Dublin, the number of completed vacant units is down by 31%.
The Dublin City Council area was the best performer in Dublin with 39% of the vacant units taken up last year. Cork has been the slowest county to deal with this issue with only a 4% decrease in the number of vacant units since last year.
Commenting on the Vacant Housing/Ghost Estates, Gemma Lanigan, director, DNG stated: "If this trend continues there is a strong argument that the completed vacant stock nationally will be put to beneficial use within five years.
"Unfortunately, there is also a further 18,000 units in various stages of construction of which over 50% are near fully complete.
"We believe that the introduction of a government grant scheme (weighted by area) should be adopted to accelerate the resolution of this problem.
"This will accelerate the completion of part built schemes and will also provide a much needed injection of tax revenues to the exchequer in the form of Vat and associated tax receipts”.
Commenting on the overall property market Keith Lowe, CEO, DNG commented: "It is our opinion that prices in certain segments of the market, especially in the Greater Dublin area, are over-correcting which has being predicated to date due to the lack of mortgage finance both to the general and investor market sectors.
"Whilst there may be some further over-correction this year we believe that 2012 will be seen as a turning point in the market cycle.
"The recent budget measures as announced in Budget 2012 which include a very attractive Capital Gains Tax provision and increased mortgage interest relief is a clear indication to us of the government’s realisation of the importance of having a fully functioning property market to the country’s overall economic recovery.
"We have also noticed towards the end of 2011 a heightened demand and increase in transaction levels for large residential portfolios from cash-rich Irish and foreign investors. This is now likely to escalate this year as investors take advantage of low prices, lack of liquidity and the new CGT exemption measure."