Survey: Second-hand house market showing signs of recovery

Estate agents, Sherry FitzGerald, announced today that the average price of a second-hand house in Ireland fell by 1.9% during the first quarter of 2008, compared to a price reduction of 2.4% in the final quarter of 2007.

The results for the twelve months to March show a price reduction of 7.5%.

This moderation in the pace of price deflation was led by the Dublin market where the results for the first quarter show price deflation of 1.4%, compared to 2.7% in the final quarter of 2007.

This brings the price deflation in Dublin to 9.2% for the twelve months to March 2008.

In contrast, an analysis of the price performance in Ireland excluding the Dublin market shows price reductions of 2.4% in the quarter and 5.7% in the year to the end of the first quarter of 2008.

The Cork market shows price reductions of 3.2% in the quarter and 7.8% in the twelve months to the end of March.

Marian Finnegan, chief economist in Sherry FitzGerald Group said: "The results for the price barometer show a definable reprieve in the pace of price deflation in the Dublin second-hand market.

"The trend of weakening consumer confidence and strengthening supply leading to price deflation commenced in the Dublin market in autumn 2006, before spreading to the rest of the country.

Ms Finnegan said the evidence from the first quarter shows that "the Dublin market is recovering", a trend which "will begin to spread to the rest of the country in the coming months".

Ms Finnegan said: "The first evidence of an improvement in market conditions came in autumn 2007 with an uplift in internet activity and viewing levels.

"This trend was further underwritten following the amendment in the treatment of stamp duty announced on December 5th with a notable rebound in transaction levels thereafter.

"Activity levels were robust in the opening months of 2008, with January in particular a very strong month in the Dublin residential market. That said, stock levels remain strong nationwide a factor which will delay the recovery period."