Prices of new homes now back at 2001 level

THE steady decline in asking prices has continued into the second quarter of 2011 with the latest figures from leading property website MyHome.ie showing prices are down 40% from their peak level in 2006. In Dublin they are down 46% from peak levels.

THE steady decline in asking prices has continued into the second quarter of 2011 with the latest figures from leading property website MyHome.ie showing prices are down 40% from their peak level in 2006. In Dublin they are down 46% from peak levels.

In quarter two the average mix adjusted asking price for houses fell by 4% nationally and 5.2% in Dublin. The annual rate of decline nationally is 14.4% while in Dublin the corresponding figure is 15.7%.

Based on average mix-adjusted asking prices, the average price for a home nationally is now €249K as opposed to €260K 3 months ago. In Dublin the corresponding figures are €286K versus €302K.

Asking prices are now down just under 8% nationally in the first six months of the year while the pace of decline in Dublin has accelerated to 8.8%.

The annual rate of decline in Dublin has been a steady 15 to 16% and this looks set to continue this year.

The author of the report, Annette Hughes, Director DKM Economic Consultants said the reductions in asking prices during Q2 are disappointing but not entirely surprising.

“At the moment our best hope for 2011is that some moderation in the rate of decline in asking prices will begin to emerge over the second half of the year.

While the worst of the recession is over, serious challenges remain. Significantly lower demand and difficulties accessing mortgage credit are adversely impacting on the market.

The absence of any firm evidence that property prices have bottomed out combined with concerns about imminent interest rate rises, spending cuts and new taxes and charges appear to be making consumers reluctant to make major purchases,” Hughes said.

Angela Keegan Managing Director of MyHome.ie said any recovery in the housing market would depend on a range of wider economic issues including employment growth.

“Clearly consumer uncertainty is discouraging buyers from availing of the greater affordability which clearly exists. Our figures indicate that the national asking price for a new home now stands at €235K – down just 0.6% in the quarter, the lowest decline since 2008.

This means prices are now back at levels last seen a decade ago,” Keegan concluded.

Leinster Spotlight

The survey shows that the prices of 4 bed semis actually rose in counties Kilkenny (4.65%), Westmeath (2.45%), Longford (5.71%), and Wicklow (2.94%) but fell by 7% in Laois, 6.9% in Offaly and Kildare, 4.6% in Louth, 5.6% in Carlow, 3.8% in Dublin and 1.3% in Meath.

Excluding Dublin, Wicklow has the most expensive 3 and 4 bed semi detached properties at €252K and €350K respectively.

The median asking price for a 3 bed semi in Leinster - excluding Dublin – is €185K down just 2% in the last 3 months while the median asking price for a 4 bed semi in the province outside Dublin is €209K down 2.6% in Q2.

The lowest asking prices for 3 bed semis were in Westmeath and Longford at €150K with ten of the 12 counties having prices below €200K.

In the 4 bed semi market the lowest asking prices were in Laois (€179K) and Longford (€185K) with 5 of the 12 counties having prices below €200K.