THE FALL in second-hand house prices in Dublin is slowing down and the market could bottom out by the end of the year, according to the latest price index from Sherry FitzGerald.
The study shows that the average price of a second-hand property in Dublin fell by 2.5 per cent in the three months up to the end of June – considerably less than the 3.1 per cent contraction in the previous quarter. This brings the total drop to 13.4 per cent over the past year.
The comparable figures for the national market saw the average price fall by 2.8 per cent in the second quarter – unchanged from the previous three months – and by 13.5 per cent over the past year.
One of the more interesting findings is that Dublin house prices have now fallen more steeply than in the rest of the country since the market ran into trouble. From the peak in 2006, Dublin prices have decreased in real terms by 49 per cent while the national market has corrected by 42.9 per cent. This, in effect, means that Dublin house prices are back to where they were at the end of 2002.
Sherry FitzGerald’s chief economist, Marian Finnegan, says that while the overall market remains “challenging”, the emerging confidence is visible through a moderation in the pace of price correction and an enhanced level of transactions, most notably in Dublin. In addition, multiple bidding on individual properties, a trend which re-emerged in the first three months of this year, remained a feature in the second quarter. Another positive sign was that a “selection” of properties sold for more than the asking prices.
It is a different story altogether in the new homes market where sales continue to be slow because of the expectation that prices could fall further once newly completed developments are sold off on the instructions of receivers or liquidators. The extreme shortage of mortgages is also affecting sales. Finnegan said the market was possibly being affected by the lack of clarity surrounding Nama. Until this was resolved there was unlikely to be a significant uplift in activity levels, though the medium-term demographic outlook for housing demand in key population centres was quite positive.
