Commuter counties hardest hit by house price decline
House prices in commuter counties of Kildare, Louth, Meath and Wicklow fell by almost 17% last year as the property boom ground to a halt, figures showed today.
The overall cost of buying a home across the country dropped by 9.1% compared to 7.3% in 2007.
Data from the 2008 House Price Index compiled by the ESRI and permanent tsb also showed the average price of a house for first time buyers fell by 14% in 2008.
The ESRI said prices in 2009 are expected to fall by a further 10% and the market is unlikely to recover until at least 2010.
ESRI economist David Duffy said: “Buyers will have to be convinced that the economy has turned the corner before confidence returns.
“While the price reductions are significant, things are not as serious as the 30-40% declines of international property markets such as in Finland in the early 1990s.”
The average price paid for a house in Ireland at the end of 2008 was €261,573 – compared to €287,887 at the end of 2007 and €310,632 at the end of 2006.
Niall Grady, general manager of business strategy at permanent tsb said: “The message is clear – after a decade of exceptional growth, we’ve entered a period of retrenchment in house prices and while the impact is being felt everywhere. There are certain areas such as commuter counties where the pressure has been particularly intense.
“Looking forward, while it’s hard to speculate over a year-long period, we don’t expect any significant change in the established pattern of this year and are guiding therefore to a further decline in average national prices in the order of 10% during 2009 with some significant variations to that in different areas.”
There was decline in average prices in Dublin of 11.7% and of 10.2% for houses outside the capital.
The permanent tsb/ESRI index is based on actual transaction prices which the organisations deem to be an accurate reflection of the market conditions.
In December 2008, the price of houses nationally declined by 0.9% during the month, compared to a drop of 0.5% in November.
The average price paid was €261,573 compared to €264,026 recorded in November.
Meanwhile, Housing Minister Michael Finneran today allocated €94m towards building 26 new voluntary and co-operative housing projects in 19 local authority areas countrywide.
“We are facing into difficult times but it is vitally important that we continue to invest in our communities,” he said.
“This is not the time to lose focus on our objective of building sustainable communities where people will like to live, work and play in.
“Despite the challenges, the Government will continue to ensure that individuals and families in need of social housing supports will be given the opportunities to have these needs met in a way that is appropriate for them, now and in the future.
“We will do this by finding more innovative ways of delivering social and affordable housing.”
