Home prices fall 0.2% in July to average €272,946

THE slump in property values is continuing with average house prices falling by a further 0.2% in July, according to the latest results of the Permanent TSB/ESRI house price index.

The ongoing decline in house prices means that they have now dropped by 5.2% in the first seven months of 2008, and by almost 10% over a 12-month period.

The survey shows that property values have fallen by 9.4% on average since a year ago.

For home owners, it means the value of the average Irish house has been falling by 70.14 on a daily basis since January.

The average price paid for a house in the Republic in July 2008 was €272,946, compared to €287,887 at the end of 2007 — a decrease of €14,941.

However, the 0.2% reduction in July is the smallest decrease since March and offers some hope that the rate of falling house prices is slowing down.

Commenting on the results of the latest house price index, Permanent TSB general business manager, Niall O’Grady observed: “Transaction volumes were light during the summer and it’s likely that this was a factor in the very low decline in average prices during July.”

Prices of houses outside Dublin have fallen at a slightly quicker rate that the price of homes in the capital so far in 2008. House prices in the regions have declined by 5.5% compared to 5.1% for those in Dublin.

The average price of homes in Dublin now stands at €377,316 — a decline of almost €34,000 over a 12-month period. Similarly, average house prices outside Dublin have fallen by almost €22,000 to €235,622.

Property values in Dublin’s commuter belt which covers the counties of Louth, Meath, Kildare and Wicklow continue to experience some of the most dramatic reductions.

House prices in the region fell by 1.2% alone last July and by 7% overall since the start of 2008.

However, the slump in the housing market has provided some good news for first-time buyers for whom prices fell a further 0.4% in July.

The average price paid by a first-time buyer is €245,539 — down 8.7% on average prices last year.

Prices for new and second-hand homes both fell by 0.2% in July.

The average price for a new house is €272,099, while second-hand homes are slightly higher at €273,142.

Meanwhile, further evidence of the property slowdown came with the revelation by the Irish Banking Federation that mortgage lending is down 13.4% over the past year.

A total of 35,154 mortgages worth €7.6bn were issued during the second quarter of 2008 compared to over 41,000 worth €8.7bn in the corresponding period in 2007.