House prices ‘down 50% since boom’

House prices have fallen by around 50% since the peak of the housing boom, two reports revealed today.

Daft.ie said asking prices for residential properties fell by an average of 7.7% in the last three months of 2011 and 18% over the year.

MyHome.ie said its prices dropped by 2.4% in the last quarter and by 13% over the last 12 months.

Both sites maintained that people are paying just half of what was paid out at the end of 2006 and in 2007.

Daft.ie said the average asking price is now just over €175,000, 52% below its 2007 peak of €366,000.

Ronan Lyons, economist with Daft.ie, said: “It is tempting to see larger house price falls as a bad thing and no doubt many, particularly those in negative equity, will see this dramatic fall in those terms.

“However, if the size of the correction in house prices is determined by fundamental factors, then it is better for the prices to race to the finishing line than crawl there.”

Author of the MyHome.ie report, Annette Hughes of DKM Economic Consultants, found asking prices nationally are now down by 43% to €236,000 compared to the end of 2006, while Dublin prices are down 50% over the same period – to €268,000.

She said the economy remains in a fragile position and that the prospects for economic growth in 2012 remain uncertain.

“House prices will not stabilise until we have a period of sustained economic and employment growth,” Ms Hughes warned.

“Right now the ongoing debt crisis in Europe combined with less than encouraging news on the international economic front as well as the fiscal consolidation programme under way means the likelihood of an acceleration in economic growth in 2012 is questionable.”

Mr Lyons said confidence and finance are central to 2012.

“It is vital to remember that recovery in the property market does not mean an increase in prices, it means an increase in transactions,” he added. “This is ultimately down to the banks, who will not resume lending until the Government’s stress tests stop punishing them for doing so.”