House prices back to 2004 levels

Average national house prices fell by 1.3% in May, according to figures released today, with prices now back to the levels they were in summer 2004.

According to the latest edition of the permanent tsb/ESRI House Price Index, the fall of 1.3% for May compares with a drop of 1.9% in April and 1% in March.

The decline in Dublin was more severe, with house prices in the capital down by some 2.2% in May, compared to a fall of 0.4% elsewhere.

In the first five months of 2009 national house prices have fallen by 6.2% which compares to a reduction of 4.4% in the same period in 2008, according to the index.

The average price paid for a house nationally in May 2009 was €245,295, compared with €261,573 in December and a peak of €311,078 in February 2007.

“Ongoing low demand combined with a significant overhang of properties for sale continues to drive prices down, particularly in segments such as first time buyers and houses in Dublin,” said Niall O’Grady of permanent tsb.

“Any improvements in affordability due to lower prices and lower interest rates will likely be ignored until economic confidence returns”.