Irish House Prices: Average national house prices fell 1.3% in October - down by 4.7% in 12-month period: Market conditions dire as 10,000 new apartments remain unsold in Dublin area

Irish
Irish House Prices: Average national house prices fell 1.3% in October - down by 4.7% in 12-month period: Market conditions dire as 10,000 new apartments remain unsold in Dublin area
By Finfacts Team
Nov 23, 2007, 15:12

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The average price paid for a new house in October 2007 was €292,896, while that paid for a second hand house was €288,654. The equivalent levels in December 2006 were €302,645 and €312,709.

Average national house prices declined by 1.3% in October, according to the latest edition of the permanent tsb / ESRI House Price Index. This compares to a decline of 0.3% in September. Measured over the past twelve months [October 2006 to October 2007 inclusive], the index shows that average prices declined by 4.7% of that period. Measured since the start of this year, that decline has been 4.9%.

The average price paid for a house in Ireland in October now stands at €295,469, compared with €309,963 in October last year.

The house price index measures the movement of house prices on a month by month basis. It is prepared by permanent tsb bank and the ESRI and is considered the most realiable measure of house price movements in the country.

However, the index does not take account of volume/activity in the market. On Thursday, the Central Bank reported that mortgage lending growth had fallen 30% in the first nine months of 2007. Last month, the respected S&P Case-Shiller index of US existing house prices showed an average fall of 4.4% in the year to August, with falls in Tampa, Florida over 10%. On an annual rate, the Irish price fall in 2007 is 4.8%.

It has been reported that Irish developers of new houses are offering non-cash discounts such as enhanced kitchen features to avoid cutting prices. Such discounts would not be reflected in a price index.

The short-term trend in index prices, does not reflect the fill dynamics in housing markets. Methodology of permanent tsb / ESRI House Price Index.

The Irish Times Property Supplement reported on Thursday, that with an estimated 10,000 empty apartments in the Dublin area, builders are opting to rent them out rather than try to sell them.

The former gasholder at Ringsend is one of a number of newly built apartment buildings in Dublin that is lying empty as developers adopt a wait-and-see approach in the ailing new homes market.

It is estimated that there are more than 10,000 empty units in the Dublin area. The vast majority of these are new apartments which have either failed to sell or have not been put on the market.

The most notable example is the Alliance Building, the nine-storey cylindrical apartment block built inside the metal struts of the Victorian gasholder at the Gasworks scheme in Ringsend, Dublin 4.

The landmark structure forms part of a 7.8-acre site bought by developer Liam Carroll from Bord Gáis in the mid 1990s. Six hundred apartments were built here, along with the office complex now occupied by Google. A further 200 apartments were built in the former gasholder.

The first 50 apartments were launched in June 2006 with prices ranging from €675,000 to just over €1 million. However, it is not clear how many of these were sold. The entire scheme has now been withdrawn from the market, according to the selling agent Hooke & MacDonald.

Figures released by the Department of Finance show that the monthly sale of second hand houses has slumped by more than 50% this year. Last January, 5,375 second hand houses were sold, bringing in €127m in stamp duty to the Department of Finance.

But by October house sales had fallen to a low of just 2,662 sales and a 50% cut in revenue to €68.5m.

Fine Gael TD Richard Bruton noted that these figures "collapsed the government's claim that we were experiencing a soft landing".

Commenting on the results of the latest permanent tsb / ESRI House Price Index, Niall O’Grady, Head of Marketing, permanent tsb bank said; “There’s little surprise in the figures for October which confirm that there was little spark in the market during the traditionally strong autumn selling season. Clearly potential purchasers remain cautious and demand is sluggish. Deferral of purchase decisions is now beginning to impact on the rental sector where rents are rising steadily in response to strong demand.”

Dublin V Rest of Country:
Dublin house prices declined by 0.4% in October, while prices Outside Dublin declined by 1.3%. In September 2007 the relative price changes were (minus) 1.2% and (plus) 0.1%. Over the first ten months of this year, prices were down by 5.6% and 4.7% respectively.

In the 12 months to the end of October 2007, house prices in Dublin and Outside Dublin declined by 4.8% and 4.9% respectively. The equivalent rates to September 2007 were (minus) 3.4% each.

The average price paid for a house in Dublin and outside Dublin in October 2007 was €403,535 and €253,938 respectively. The equivalent prices in December 2006 were €427,343 and €266,339.

Commuter Counties: - Louth, Meath, Kildare & Wicklow
House prices in the commuter counties of Dublin declined by 0.1% in October 2007, compared to a slight increase of 0.1% in September 2007. During the first ten months of this year prices reduced by 5.4%. Year on year growth to October 2007 in the Commuter counties was (minus) 5.5%, compared with the (minus) 4.7% recorded in the 12 months to September 2007.

The price of a house in the commuter counties in October 2007 was €325,568, down from €344,186 in December 2006.

3 Bedroom Semi-detached Houses
3 bed semi-detached house prices declined by 0.1% in October 2007, while in September this year prices grew by 0.6%. During the first ten months of this year prices were down by 3.0%.

House prices in this category declined by 2.6% year on year to October 2007 compared with a reduction of 2.4% in the year to September 2007. The price of a 3 bedroom semi in October 2007 was €302,536 - down from €311,906 recorded in December 2006.

First time buyers V. Second time buyers:
House prices in October for first-time and second-time buyers reduced by 1.0% and 1.3% respectively. In September 2007 the average price paid for first time and second time buyers was down 1.6% and 0.3% respectively. During the first ten months of this year prices were down by 6.2% and 5.1% respectively.

House prices declined by 6.1% and 4.9% year on year to October 2007 for first-time and second-time buyers respectively. The equivalent growth rates to September 2007 were (minus) 4.7% and (minus) 3.1% respectively.

The average price paid by a first-time buyer and a second-time buyer in October 2007 was €261,776 and €331,576 respectively. The equivalent prices in December 2006 were €279,003 and €349,213.

New V. Existing Houses
House prices for new and existing houses were down by 1.3% and 2.3% respectively in October. In September this year the equivalent price changes were 0.0% and (minus) 2.2%. During the first ten months of this year prices reduced by 3.2% and 7.7% respectively.

Prices for new houses declined by 2.5%, while prices for second hand houses declined by 7.7% year on year to October 2007. The equivalent rates of growth to September 2007 were minus 1.7% and minus 4.8% respectively.

The average price paid for a new house in October 2007 was €292,896, while that paid for a second hand house was €288,654. The equivalent levels in December 2006 were €302,645 and €312,709.