A member survey by the Irish Auctioneers & Valuers Institute (IAVI) has confirmed that value of houses has dropped by an average of 9.2% nationwide in the second quarter of the year.
While this will not come as a big surprise to many it is good that this news is coming from the mouths of those who have for so long stoked the fires of the property bubble. If the auctioneers are resigned to the fact that the falls in prices are drastic then you know it must be true.. or even worse.
The new Daft.ie rental index published today shows that the Irish property market is struggling under its own weight. Today’s figures are consistent with pretty much all other figures released about Ireland’s waning economy since the start of the year. Rental prices in Ireland are going down and they will continue to go down for the foreseeable future.
The reasons for this are obvious. People have less money to spend on rent; there are less people in the country, there is less money in the country and there are more and more properties coming onto the rental market. This is great for renters and in a way it is great for Ireland as the country tries to combat the serious cost of living which in turn affects the high cost of doing business in this country.
As thousands of students also finish for another summer it is likely that as they struggle to find summer work landlords too will struggle to find tenants.
Daft.ie today came out with there (as always) interesting quarterly report. At the same time the Bank of Ireland have announced some sort of cheap mortgage scheme using €1 billion of tax payers money. To be honest the details are not even worth reading. People should not be buying houses now.
House prices are continuing to fall as indicated by the latest ESRI/ permanent TSB House Price Index. The chart below illustrates just how much has fallen of the average house in Ireland since prices peaked in 2007.
Expectations of a return to a vibrant market are very hopeful. The property donkey is dead and if we compare our situation to other countries then we can expect a 40%-60% drop in prices. Dublin prices peaked in April ‘07 and have since seen a drop of 16.6%. With a stockpile of empty property, banks not willing to lend, people not willing to buy and a very uncertain future for the economy it is inevitable that property prices will continue to slide.
In the first 10 months of 2008 there were 43,513 property completions. The total for 2007 was 78,027. A signs of the times. 2009 is going to be a tough year for the sector and as a result the country that relied so heavily on it.
