Some housing micro-markets showing signs of recovery

LACK of finance, lack of transparency, and a lack of hard data on what houses are selling for are combining to keep Ireland’s housing market in the doldrums.

And, that stricken market has fragmented into a number of ‘micro-markets’, some of which are recovering, with others still a good way to go to reach bottom, according to a just-released survey of Irish estate agents which said the lack of a functioning banking system was having “a crippling effect on the property market”.

The bad news for home owners, according to the IAVI/SCS 2010 survey, is that prices are continuing to fall. The good news, though, is the rate of decline is moderating from 2009. However, sectors such as apartments continued to see large drops, by as much as 20% to 25% in the past year alone.

New house prices nationally were marked down by 16.5% in 2010, marginally more than the Dublin average of 15%.

Overall Munster house prices dropped 15.2% in 2010, and Leinster values were down around 17.1% , both showing a 2% ‘improvement’ on even larger falls in 2009.

However, in broad terms acting CEO Edward Carey said: “We can no longer rely on average national house price figures as property values are largely dependent on property type and location. We are now seeing the emergence of a number of ‘micro-property markets’, where the basic fundamentals of desirable location, high quality stock, schools, employment opportunities and transport links are good.

“Anecdotally, activity in these areas is relatively strong and, as a result, the pace of decline has moderated significantly, whereas areas lacking these fundamentals are suffering,” added the head of the amalgamating property body which now combines surveyors and auctioneers in a 4,000 member strong group.

Despite some signs of a levelling off of price drops in select areas “the lack of availability of mortgage finance for qualified buyers is putting further pressure on the property market,” Mr Carey added.

With a general election now coming, the industry body called for urgent enactment of legislation to give statutory powers to the Property Services Regulatory Authority (PSRA), both to regulate the industry and to implement a badly needed National Property Price Register.

“In order to reach a level of stability, the property market requires a fully functioning banking system than can provide mortgage finance to qualified buyers. Despite NAMA having acquired several tranches of loans from financial institutions, the survey results suggest that the availability of mortgage finance to qualified buyers has not improved in 2010 and this is having a crippling effect on the property market,” said Mr Carey.