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News : Irish Last Updated: Apr 24, 2009 - 5:31:05 PM


Irish average national house prices fell by 0.6% in June according to permanent tsb / ESRI House Price Index ; Prices down by 9.7% in year to June but survey likely understating actual decline
By Finfacts Team
Aug 11, 2008 - 5:30:39 PM

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  • The average price paid for a new house in June 2008 was €272,532, while that paid for a second hand house was €273,592. The equivalent levels in December 2007 were €290,296 and €284,608.
    Figures show national house price reduction of 0.6% in June
  • First half of 2008 reduction stands at 5.0%, while year on year the rate is 9.7%.

Irish average national house prices fell by 0.6% in June according to the latest edition of the permanent tsb / ESRI House Price Index. This follows reductions [1.2%] in May, [1.1%] in April, [0.7%] in March, [0.8%] in February and [0.7%] in January. In the first half of 2008 average national prices fell by 5.0%, compared with -4.4% to May 2008 and a drop of 2.6% to June 2007. Measuring the rate of growth in the 12 months (year on year) to June, average national prices were down by 9.7%.  This compares to a decline of 9.5% recorded in the 12 months to May.

The average price paid for a house nationally in June 2008 was €273,392.  This compares to €287,887 in December 2007 and €302,605 in June last year.

The index does not take account of volume/activity in the market which is significantly down, as reflected in stamp duty receipts and mortgage approvals.

Methodology

Dermot O'Leary, Chief Economist of Goodbody Stockbrokers, said last November, that three reasons can be cited for a discrepancy between its expectations of house price falls and the permanent tsb / ESRI House Price Index. Firstly, the data are reflective of prices at the mortgage payment stage of the house-buying process. This can be some 3-4 months after a sales price is agreed, and, in a slower market, this lag could get extended further. Therefore, there is a significant lag between market prices and the official house price data. Secondly, the type of properties in the ptsb database may be concentrated towards the lower price range in the market.While recognising the fact that the ptsb data takes account of the different characteristics of the house, the average price in the country is well below the estimates contained in the dataset from the Department of the Environment.Finally, price incentives, which have become common for new scheme developments, would not get reflected in the data.

Commenting on the results, Niall O’Grady, General Manager Business Strategy, permanent tsb said:  “Price reductions are continuing nationally and while there have been reductions in all segments of the market, the sharper fall in the price of new houses reflects a more aggressive approach by developers in order to stimulate some market demand.”

Dublin V Rest of Country

Dublin house prices fell by 0.2% in June while houses outside Dublin reduced by 0.8%.  In May the relative price changes were -1.6% and -0.8%.

In the first half of 2008 prices for Dublin and Outside Dublin were down 4.5% and 5.1% respectively. The equivalent changes last year were -2.0% and -3.2%.

House prices were reduced by 9.4% and 8.3% in the twelve months to June 2008 in Dublin and Outside Dublin respectively. The equivalent changes in the twelve months to May were -10.4% and -8.4% respectively.

The average price paid for a house in Dublin and outside Dublin in June 2008 was €379,727 and €236,576 respectively. The equivalent prices in December 2007 were €397,507 and €249,359.

Commuter Counties: - Louth, Meath, Kildare & Wicklow

House prices in the commuter counties of Dublin fell by 1.4% in June 2008, while the reduction in May was 0.9%. In the first half this year prices fell by 5.9% compared to 3.9% last year. A year on year reduction to June 2008 in the Commuter counties of 8.5% compares with 7.9% in this category over the 12 months to May.

The price of a house in the commuter counties in June 2008 was €302,541, down from €321,403 in December 2007.

3 Bedroom Semi-detached Houses

3 bed semi-detached house prices reduced by 0.5% in June 2008, compared with a reduction of 1.3% in May.  Year to date prices fell by 2.8% compared to 4.8% in same period last year.

House prices in this category were reduced by 2.0% year on year to June 2008 compared with a reduction of 2.9% to May 2008. The price of a 3 bedroom semi in June 2008 was €290,934 - down from €299,412 recorded in Dec. ‘07.

First time buyers V. Second time buyers:

House prices for first-time and second-time buyers were reduced by 0.2% and 0.6% respectively in June 2008. In May the equivalent rates showed reductions of 1.2% and 1.5%. Year to date prices for first-time and second-time buyers were down 5.5% and 4.7% respectively, while growth rates for the same period last year were -3.2% and -2.6%.

House prices were reduced by 8.7% and 9.9% year on year to June 2008 for first-time and second-time buyers respectively. The equivalent rates to May were reductions of 9.4% and 9.9% respectively.

The average price paid by a first-time buyer and a second-time buyer in June 2008 was €246,529 and €306,380 respectively. The equivalent prices in December 2007 were €260,786 and €321,498.

New V. Existing Houses

House prices for new and second-hand houses reduced by 1.3% and 0.4% respectively in June 2008. In May the relative price reductions were 1.7% and 1.5%. Year to date prices for new and existing houses were down 6.1% and 3.9% respectively. The equivalent changes last year were -1.2% and -2.7%.

New and second hand house prices fell by 8.8% and 10.1% respectively year on year to June 2008. The equivalent changes to May were -8.3% and -10.0% respectively.

The average price paid for a new house in June 2008 was €272,532, while that paid for a second hand house was €273,592. The equivalent levels in December 2007 were €290,296 and €284,608.

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