The downward trend in house prices that has been in evidence since last September, continues. But after five months of consecutive, albeit small, declines in the price of houses, the property market may be bottoming out.
The latest Permanent TSB/ESRI review of house-price movements certainly indicates that the froth has gone out of the market. However, the cumulative decline in house prices of 3.1 per cent over five months that the survey reveals, is far from a slump. Houses are still more expensive now than they were 12 months ago. In addition, the reverse in prices is more pronounced at the top end of the market than in the sectors targeted by first-time buyers.
Despite these caveats, the developing trend is a fortuitous one for a Government that will shortly face the electorate. This coalition can - and presumably will - claim that their approach to stabilising the property market has worked. The reality is somewhat different. The trend now being seen in the property market is primarily a function of the general economic slowdown. Much of what the Government has done over the last few years could be characterised as little more than tinkering around the edges.
... ... * ... * ... * ... ...
The vast majority of the measures introduced on foot of three reports commissioned from the economic consultant, Mr Peter Bacon, have been set aside. The Government is now trying - via the Finance Bill - to encourage investors back into the rented property sector having previously identified them as one of the prime sources for the boom in residential property prices.
The evidence from yesterday's survey is that the fall in house prices has accelerated in recent months and some further easing in prices can be expected in the coming months. The forthcoming Spring sales season may indicate the first signs of recovery in a market which should find support from some fundamental factors, such as the presence of investor demand and a reasonable number of potential first-time buyers. However it would be unrealistic to expect confidence to return fully to the market until there is some firm evidence that the wider economy has turned the corner. We are still waiting.