Dublin house prices half their boom time high

RESIDENTIAL property prices are continuing to tumble — albeit at a less rapid rate — with figures showing a 12.2% drop in the year to the end of last month.

House prices in Dublin are now almost half what they were in 2007 at the height of the boom, and nationally, residential property is now 38% lower than in 2007.

Figures published yesterday by the Central Statistics Office on the Residential Property Price Index (RPPI) shows a bigger drop in the prices of residential properties outside of Dublin last month than in the same month last year — 2.1% this May compared to 1.2% in May 2010.

However, the CSO stressed that monthly figures needed to be treated with caution as they can indicate short-term market volatility.

In Dublin, residential property prices were 11.5% lower than a year ago. However, it must be noted that in the year to April, the fall was 13% and in the year to May 2010 the fall was 15%.

A further example of the slowdown in the decline in prices can be seen when one considers that in the year to May 2010 apartment prices fell by 17.9%. Yet in the year to May this year the decline was on 14.8%.

The RPPI is designed to measure the change in average prices paid for residential properties.

NCB Stockbrokers chief economist Brian Devine said: “We still expect that national property index to contract and register a fall of between 45% and 55% on the back of tight credit conditions, slack employment, increasing interest rates, lack of mobility due to negative equity and tracker mortgages and an oversupply in certain regions.”

He said price declines in Dublin were more reflective of where he expected the national average to fall.

Alan McQuaid, chief economist with Bloxham Stockbrokers, said: “Given weak labour market conditions and the continuing lack of available bank credit it is hard to be optimistic on the prospects for the property market in the immediate future.”