Property prices report pulverised

LOCAL auctioneer Matt Dunne has rubbished the latest report which shows the greatest fall in nationwide house prices occurred in Offaly over the past year.

LOCAL auctioneer Matt Dunne has rubbished the latest report which shows the greatest fall in nationwide house prices occurred in Offaly over the past year.

The report sets the average asking price for a house in the county at €161,932 for the second quarter of this year, a drop of 11.7% on last years prices for the same period.

The property report also sets prices for a one bedroom house at €70,000; a two bedroom at €98,000; a three bedroom at €141,000; a four bedroom at €210,000 and a five bedroom at €272,000.

These figures represent a drop of 17.3% year on year change and a change of -48.5% from the peak.

Asking prices for residential property around the country fell by an average of 5.1% during the second quarter of 2011, according to the latest report published by property website The average asking price in June was €196,000, a fall of 47% from the 2007 peak.

However, well known Portarlington based auctioneer Matt Dunne said the figures were not accurate, saying banks are ‘almost closed for business’.

He said in the last two months bank lending has been getting tighter and tighter.

“The report looks at the last 100 three bedroom semis sold in Offaly, but does not take into account factors such as accessibility, the builder or how successful the estate is. They can quote statistics in cities. Down the country these are not applicable,” argued Mr Dunne.

“Commerce has almost stopped as we know it,” he said, adding that banks are barely lending money at all.

Mr Dunne outlined that there are people out there who want to buy houses as “life goes on”. “The way we are going to get out of this recession is through the resilience of the public to keep going.”

Interest in buying instead of renting is on the increase he said as rents are staying up while repayments on a three bedroom semi detached equate to rents at the moment.

“People can’t get finance,” lamented Mr Dunne who also questioned ther validity of statistics that claim 95% of those applying for loans are successful. He said while 95% of applications at HQ level are successful, 95% of those at branch level are being sieved out and dont even make it to HQ.

Mr Dunne also dismissed the report’s estimate of €141,000 for a three bedroom house in Offaly, saying in Portarlington this would cost €100,000.

Meanwhile John Mollin of PropertyTeam Mollin Estates in Tullamore said there is “a terrible air of uncertainty” surrounding the property market.

He said people who have been sanctioned for mortgages are still waiting for prices to fall next year. However, this he suggested, may prove unwise. He outlined that those wishing to avail of mortgage interest relief as a first time buyer or for self build houses only have until December 31 to do so before it will be reduced. “This is quite significant,” he quipped.

Mr Mollin also highlighted that there is unbelievable value in the market now. He said it is now cheaper to buy existing houses than to build even with some builders quoting as low as €60 per square foot. “A lot of properties are being sold at much less than it cost to build them.”

Mr Mollin felt the figures quoted by in relation to one to five bedroom houses were accurate and reflective of the property market in Offaly.

Mr Mollin said the reason for such a fall in prices can be attributed to the whole economic situation at the moment. “There is a high rate of unemployment and you can’t get a mortgage if you cant get a week’s wages. Consumer spending is way down. The whole circle of the economy is part of the property bust. It’s all intertwined.”

In Dublin, asking prices fell by 5.7% over the past three months, and now the typical asking price is half of what it was during the peak in 2007. Cork, Galway and Limerick cities, also experienced similar drops in prices, falling between 5% and 6% over the same period, while Waterford city saw falls of almost 9% on average. Outside the main cities, many parts of the country - including Donegal, Cavan and Laois - saw even steeper falls of up to 10%. The smallest falls, of less than 2%, were in Kerry and Mayo, which have seen in general some of the smallest falls from the peak.

Ronan Lyons, economist with said: “The second quarter of 2011 has seen one of the sharpest adjustments in prices since the correction started four years ago. With successful auctions of distressed properties at 60% or more below peak levels, the sharp fall may actually reflect increased realism on the part of sellers. Other factors are also important though. One is the intense competition sellers face due to the high level of stock sitting on the market, especially outside Dublin. Another factor is that would-be buyers continue to face significant obstacles to obtaining a mortgage. Nonetheless, over half of properties posted for sale in Dublin at the start of the year are now sold or sale agreed.”

Meanwhile figures from have varied slightly with the property website showing a 16.19% decrease in average house prices in the county between 2010 and 2011. It has also recorded a drop of 6.9% in the second quarter of this year.

The site has the average four bedroom house in Offaly coming in at €209,500 and €187,500 for a three bedroom house in the county.