Property prices down 12.5% but Dublin sees small recovery

RESIDENTIAL property prices continued to fall in July with the cost of property dropping by 12.5% in the year to date.

Figures published by the Central Statistics Office (CSO) show that residential property prices outside Dublin are down almost 40% compared with the boom in February 2007, while prices in the capital are down 49%.

However, the figures also show that while residential property prices — made up of both houses and apartments — fell 0.8% in July, the rate of decrease has slowed, as the decrease in June stood at 2.1%, the biggest monthly fall in two years.

In addition, house prices in Dublin actually rose 0.3% in July, but were still 11.6% lower than in the same month last year.

Apartment prices continue to fall at a quicker rate, falling 1.9% in Dublin in July, meaning apartment prices in the capital were 13.7% less than in the same month last year.

Apartments in Dublin are now just over 54% lower in price than in February 2007.

Overall, Dublin residential property prices stayed the same in July as they were in June when they declined by 2.4%.

The CSO’s Residential Property Price Index is compiled using data on mortgage drawdowns and stamp duty returns.

Ronan Lyons, economist with daft.ie, said the Allsop “firesale” auctions held this year and last meant people now had a better idea as to the actual prices for certain properties.

He said those prices were creating a bigger rental yield on the properties, and that factors such as the credit environment needed to be taken into account when trying to predict future property price movements.

“If banks were to be a little less uptight about mortgage lending next year we could see prices in Cork and Dublin stabilising,” he said.

“It will probably take longer in the rest of country due to over-supply and job creation, with Dublin and Cork likely to be the centres of job creation.

“The fundamental issues with buying or renting apply regardless of what’s happening in the market.

“There is an assumption that buying is always better and that’s not always the case.”

He added that rents had stabilised and the Allsop auctions meant people now had a better idea as to the actual cost of property, and this could have a more pronounced influence in future if and when the number of auctions increases.

A spokesperson for the Department of Justice said: “The up-to-date position is that the Programme for Government contains a commitment to improve the quality of information available on the Irish housing market by requiring that the selling price of all dwellings is recorded in a publicly available national housing price database.

“The minister intends to give effect to this commitment by assigning statutory responsibility for publishing details of residential property sales prices to the Property Services Regulatory Authority.

“The Property Services (Regulation) Bill 2009, which provides for establishment of the authority, is currently awaiting Dáil committee stage.

“The minister intends to table amendments to the bill which will have the effect of expanding the authority's statutory functions to include the publication of residential property sales prices. This information will be supplied to the authority on an ongoing basis by the Revenue Commissioners, who are in receipt of it for stamp duty purposes.”