Second-hand houses fall by 7%

Second-hand house prices dropped by almost 7 per cent in 2007, according to one of the Republic's biggest estate agents.

Sherry Fitzgerald said yesterday that second-hand property prices fell by 6.8 per cent throughout the State, but declined by 9.9 per cent in Dublin.

The average cost of a second-hand house in the city is now about €480,000.

Excluding the capital, second-hand prices fell by 3.1 per cent last year.

Values in Cork fell by 4.5 per cent in 2007, Sherry Fitzgerald said.

In the last three months of 2007, second-hand house prices fell by 2.4 per cent, with those in Dublin dropping by 2.7 per cent, and 2.1 per cent for the rest of the Republic.

Second-hand prices in Cork dipped by 2.3 per cent in the last quarter.

Sherry Fitzgerald chief economist Marian Finnegan said yesterday that Dublin prices suffered most because of the uncertainty surrounding stamp duty which dogged the market between late 2006 and last December.

She said that once the issue was raised in September 2006, potential buyers in Dublin began to hold off.

"The majority of properties in Dublin would have been hit with substantial stamp duty charges, so the uncertainty had a greater impact than on the rest of the country," she said.

Sherry Fitzgerald said that following a "challenging" 2007 for the property market, the outlook for this year was positive.

Ms Finnegan added: "The combination of the ending of speculation in relation to stamp duty, greater certainty in terms of the interest rate environment and a reduction in the supply of new product on the market will facilitate a more robust year in 2008."