House prices set to see some recovery

HOUSES in city locations will see some recovery this year, as figures show asking prices plunged 14% nationwide in 2010.

Experts said changes to stamp duty announced in the budget will boost the market this year with three and four-bedroom homes in traditionally well-located city areas expected to perform best.

The apartment, holiday home and rural house sectors will be worst affected in 2011, because of over-supply and lack of demand, according to Savills director of residential Catherine McAuliffe.

“What we have noticed is that the pace of reduction in prices has slowed down considerably, reflecting an acknowledgement by purchasers that the market has corrected and that there is value to be had in some areas.

“In Cork areas such as Douglas, Blackrock and Bishopstown we have experienced some stabilisation in the last few months of 2010, with prices having fallen from between 40% to 60% from peak. As these are areas close to all amenities and with fixed supply of well-located family homes, we believe these locations will be the first to recover,” she said.

Nationally the average selling price of a second- hand house fell by 4.2% in the fourth quarter of 2010, bringing the total yearly drop to 12% according to Sherry FitzGerald.

In Dublin, prices fell by 11.6% last year and by 12.2% in Cork for second-hand homes.

From the peak, house prices have plunged just over 48%, bringing prices back to late 2002 levels.

Chief economist with the Sherry FitzGerald Group Marian Finnegan said the greatest challenge for all markets in the year ahead was the availability of credit. “True stability will only be achieved with a normalisation of the credit flow in the economy,” she said.

Statistics published by property website Daft yesterday shows asking prices for residential property around the country fell by almost 5% in the final quarter of 2010, bringing the total fall for the year to 14%. By the end of 2010, the national average asking price had fallen 40% from the 2007 peak and stood at just below €220,000.

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