Housing market on track to stabilise as agents record rise in transactions

THE housing market is on track to stabilise during the second half of the year, with estate agents seeing a jump in viewing levels and transactions.

They also said multiple bidding on individual properties has become a feature for the first time since the market began to contract.

According to figures from Sherry FitzGerald, the first quarter of 2010 saw the national housing market contract by 2.8%, compared to a contraction of 8.3% in the same period a year earlier. The estate agent said that if trend lines persist, there is every reason to believe that the Dublin market will stabilise during the latter half of 2010.

Sherry FitzGerald economist Marian Finnegan said: “The housing market continued to correct in the opening months of 2010, but notably at a much reduced pace, particularly compared to the same period in 2009.

“The moderating price deflation coincided with some positive underlying demand trends, particularly in the Dublin market.”

The Cork market saw prices falling by 2.4% in the opening quarter, bringing the results for the 12 months to minus 16%.

From the peak of the market in 2006, Dublin house prices have fallen in real terms by 46.8%, while the national market has corrected by 41.2%.

“There is no doubt that it is still too early to call the bottom of the overall market but the emerging evidence continues to support a view that the Dublin market is beginning to bottom out.

“This trend could be disrupted by events such as rising interest rates, or other factors which could negatively impact confidence. However, if current trend lines persist there is every reason to believe that the Dublin market will stabilise during the latter half of 2010,” said Ms Finnegan.

The average price of a second-hand property in Dublin fell by 3.1% in the first quarter of the year, bringing the total drop in prices to 16% during the 12 months to March.

The comparable figures for the national market saw the average price of a second-hand house in Ireland fall by 2.8% in the first quarter, bringing the total drop in prices to 15.7% during the 12 months to March.

This in effect means that prices in Dublin and Ireland are back at levels achieved in the opening quarter of 2003. First time buyers just over half of the properties traded in that period.

An analysis of the profile of vendors who sold their property through Sherry FitzGerald in the year to date revealed that 30% of vendors were selling investment properties, compared to 27% during the same period in 2009.