Dublin market leads way in house value collapse: survey

A NATIONWIDE review of the Irish property market among IAVI member auctioneers shows the Dublin market leading the league of major value collapses.

At a time of major developers’ loans moving into NAMA, some Dublin apartment sites are down by 73% in value, while high-end housing in the capital has seen values tumble by 60%, say front-line selling agents.

And, they say, the drops are nearly over, with the market for second-hand or existing homes at least near rock bottom.

However, in many locations first-time buyers are sitting on the fence, hoping for ‘fire sales’ of development properties via NAMA, it was noted, while any land sales in 2010 are likely to only come about via the banks not covered in the Guarantee Scheme/NAMA, and from receivers.

Overall, according to the IAVI, house values have fallen 40% on average from their 2006 peak values, and by 20% alone in 2009, said the surveyed IAVI members.

The estate agents’ body said setting up a National Property Price Register was urgent in order to give “real-time accurate market information” on sales to end conflicting data from various sources.

“Providing timely, clear details and descriptions of price movements will undoubtedly improve understanding and confidence in the sector. This information is readily available and just requires the political will for its establishment,” said IAVI president Aine Myler.

The survey found that sales activity “for most of 2009 was virtually non-existent” but noted a bit of pick-up in the last quarter of 2009 as buyers moved on heavily price-discounted homes.

The volume of unsold newly built and existing homes may be more than 130,000 units (10,000 new homes in Dublin alone), it revealed, “and it will take in the region of four years to clear before the market returns to equilibrium”.

As builders moved stock from sales to rent, the rental market is approaching saturation and rent fell by between 15% and 23% in 2009, according to this week’s report. According to the IAVI, while values have fallen most in Dublin, the recovery is also most likely to start there, with some optimism already from the fourth quarter of 2009 but there was evidence of a two-tier market emerging: Dublin versus the rest of the country.

“A market-wide recovery is unlikely to start this year and it will probably be well into 2011 before this takes place,” the survey notes.