Irish house prices 'now down 55.2%' from peak

The average price of a second-hand property in Dublin fell by 6.2% in the second quarter of the year, according to the latest house price survey by Sherry Fitzgerald.

This brings the total drop in Dublin prices in the 12 months to end June to minus 15.9%.

Nationwide, the average price of a second-hand house fell by 5.1% during the same period, bringing the total drop in prices to minus 15.3% during the 12 months to end June.

The Cork market saw prices fall by 3.4% in the first three months, bringing the results for the year to minus 13.1%.

"From the peak of the market in 2006, Dublin house prices have fallen in real terms by 60.2%, while the national market has corrected by 55.2%," Sherry Fitzgerald said.

The survey also reveals that 88% of second hand homes bought were purchased by owner-occupiers, while first-time buyers remain the most active section in the market.

Sherry FitzGerald Chief Economist Marian Finnegan said the index results place the Irish property collapse "as one of the most significant recessions in the post-war era".

"Accelerating deflation at this point in the property market cycle is somewhat contradictory as the factors underpinning the market have strengthened with improved affordability and relatively tight supply, particularly for family homes in the urban centres," she said.

"However the appetite for the volume of transactions required to stabilise the market is hampered by low consumer sentiment and a dysfunctional mortgage market.”

Ms Finnegan said that the market looked set to remain 'challenging' for the rest of the year given falling Irish consumer confidence and barriers to accessing finance.

"A more stable economic environment and an improvement in the credit flow are both essential ingredients to true stability in the wider property market," she said.