A fundamental downward shift in house price expectations over the country as a whole occurred in the last three quarters of 2006 according to a report published by property website Daft.ie today.
The overall growth in asking prices in 2006 was just 3.8%. Calculations in the Daft report are based on asking prices as opposed to closing prices.
The report also shows that, although there was little growth in asking prices in quarter four 2006, there were some striking regional variations that run contrary to this trend.
Sligo town experienced the fastest growth in house prices, growing 18% in the last six months of 2006 alone. Swords and Tralee also performed strongly with 13.5% and 11% growth respectively.
Asking prices in Dublin city have not grown since July 2006. Nevertheless, some areas in the capital still managed growth, with Clondalkin and Mulhuddart coming out on top with 7% growth in the latter half of the year.
This is in stark contrast to nearby Clonee and Maynooth, where asking prices decreased by 9.4% and 8.8% respectively.
Explaining these variations, Damien Kiberd, economic commentator, said: "With the capital gearing up for significant high-rise development, the appetite for some suburban locations may be on the wane.
"Very significant competition among developers, particularly in north and west county Dublin where new suburbs are under construction, tilted the market balance in favour of buyers, with developers forced to offer “extras” such as top-class kitchens, designer-planned gardens and 'neighbourhood/lifestyle concepts' in order to achieve sales."
Donegal is the cheapest county in the country to buy a property. There you can get a 5-bed property for approximately €317,000. This compares to €2.3m for the same property in Foxrock.
Limerick is still the cheapest city, but this might be changing, as asking prices grew by more than 11% in quarter 4 of 2006 - 20 times faster than Cork city over the same period.
Commenting on the report, Brian Fallon, Director Daft.ie, said: “With the now clichéd 'soft landing' being the consensus amongst economic commentators, the real news from 2006 is the transition from a seller's to a buyer's market.
"First-time-buyers can breathe a sigh of relief as the double-digit house price inflation of the last 10 years is finally over and with it the pressure to get on the 'ladder' before it's too late.
"Supply is now at an all-time high. There were over 55,000 properties for sale listed on Daft in the last quarter of 2006 compared with 12,000 the previous year. This vast choice means that buyers can afford to be choosy and also take their time finding the right place without the fear of prices shooting up."