House plot prices see a decrease of up to 19%

PRICES paid for house sites plunged dramatically last year, with Dublin prices falling by up to 19% while plots in the rest of the country dropped by as much as 15%.

Figures released by the Irish Association of Auctioneers and Valuers (IAVI) also showed house prices in Dublin likely to fall 4.1% this year, extending last year’s 10% drop.

Outside Dublin, average home prices will probably decrease by about 3% this year, according to the report, which found Cork and Galway having already taken the biggest hits.

House prices fell by 12% to 13% in Cork last year and by up to 15% in Galway, according to the figures.

The IAVI said some sectors in the capital, such as second-hand apartments, saw falls of up to 17%, while second-hand urban homes dropped by about 14%.

In Cork city, one IAVI member described activity as “lower than at anytime since the mid-1980s”, while several other members said first-time buyers have disappeared from the market in Cork because of a lack of confidence and uncertainty over affordability.

Across Munster, price falls are reported to be in low, single-digit figures, and one member in Galway city said there was a “complete stop” in residential sales.

The price paid for a residential site in Munster is down between 9% and 11%, while Connacht saw a drop of up to 8% and Leinster a fall of up to 15%.

Figures published earlier this month showed housing registrations, a proxy for starts, fell 62% in December from a year earlier.

The IAVI said media comment on the economy is to blame for a certain amount of the lack of confidence in the market, but it also blames uncertainty about stamp duty, excessive price expectations and higher interest rates.

IAVI president Robert Ganly said: “We are able to predict that prices will fall in 2008, but not by nearly as much as they did in 2007. This levelling off should begin to reverse itself in early 2009, and we would hope to see the property market growing again some time during that year.

“The impact of the Government’s stamp duty reforms has yet to be felt, and we feel that these will have a measurable, positive, impact on the residential market.

“Overall, I would say to people that the market is beginning to stabilise. The worst is over.”

The report also noted a shift in preference from buying to live in to renting to live in which it said is marked in several parts of the country with a significant increase in the supply of apartments being let by investors.

Also yesterday British house prices fell for a third month in January, according to property web site Rightmove Plc.

The average asking price declined 0.8% to £230,428 (€310,800) from December.