House prices fall 2.6% in first half of year

[pfkf1]

In continuing signs of a slow-down in the property market, the index found the average price paid for a house in June was €1,561 less that the price in May, representing a 0.5 per cent decline in June.

This follows a reduction in national house prices of 0.8 per cent in May and April and 0.6 per cent in March.

The average price paid for a house nationally in June 2007 was €302,605, compared with €310,632 in December 2006. In the 12 months between June 2006 and June 2007, house prices rose by only 0.9 per cent.

Dublin house prices fell by 1.3 per cent in June, and there was a reduction in prices of 0.9 per cent for houses bought outside the capital. Over the first half of this year, prices declined by 2 per cent and 3.2 per cent respectively.

However, in the 12 months to the end of June, house prices in Dublin grew by 4.1 per cent while outside Dublin they fell by 0.4 per cent over the same period.

The average price paid for a house in Dublin and outside Dublin in June was €418,905 and €257,945 respectively. The equivalent prices in December 2006 were €427,343 and €266,339.

In the commuter counties of Louth, Meath, Kildare and Wicklow, house prices fell by 0.7 per cent in June, compared to growth of 0.3 per cent in May 2007.

During the first half of this year, prices fell by 3.9 per cent in these areas, while year-on-year growth to June was 0.9 per cent. This was lower than the 3 per cent growth recorded in the 12 months to May.

The average price of a house in the commuter counties in June was €330,712, down from €344,186 in December 2006.

Full Story @ http://www.ireland.com/newspaper/breaki ... king28.htm

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If this rate of decline of house prices conitnues, surely it is a clear sign of the construction industry collapsing, as supply has now reached demand, this will lead to huge layoffs in the construction industry which will put huge pressure on the tax payer, and thus public services will suffer.

The housing market needs to introduce new ways of attracting people to buy houses, they have not needed to do this the last 10 years, now they must find ways to stimulate the market, and make the potential housing crash a much smoother landing, otherwise the country will suffer as a whole.

It is also up to the government to try and enduce something in the market as it seems to be declining rapidly, they need to try and get investors from abroad in the short term so as there is still some demand for houses, until we come to a more realistc figure of building houses year on year unlike the 80,000/90,000 houses that have been built each year for the last number of years which is not currently sustainable.

[zakalwe]

price falls by 2.6%, inflation is at 5% therefore the fall, in real terms, is 7.6%.

thats a figure you won't see in the papers!!!

[Cael]

Good news for young people who need homes.

[pfkf1]

Good news for young people who need homes.

yes but what about young people who have purchased a home?

[zakalwe]

price falls by 2.6%, inflation is at 5% therefore the fall, in real terms, is 7.6%.

thats a figure you won't see in the papers!!!

and that only for the first half of the year!

[Eirenua]

yes but what about young people who have purchased a home?

Good point, the answer is that certain people knew that this was going to happen and still encouraged young people to buy homes . Someone should be made stand up and account for why this was let happen and who let it happen

[Squire Allworthy]

Good news for young people who need homes.

yes but what about young people who have purchased a home?

If they are buying the building as a house it should even out over the next 10 years. If they are buying as an investment;tough.

[mollox]

Good news for young people who need homes.

yes but what about young people who have purchased a home?

Most people are still ahead, a relatively small number who bought this year will be out of pocket - but only on paper.

It's good news for people who want to buy homes and bad news for people who think houses are an investment - and that includes many FTBs who thought that this was an effortless way of making money, some on 100% borrowed funds.

What will the chattering classes talk about, now that some of the sheen has been removed from the property market?

[Cael]

Good news for young people who need homes.

yes but what about young people who have purchased a home?

I feel sorry for them, but there are alot more generations to come who shouldnt be condemed to this insanity.

[freedomlover]

This is what the people who carried out the survey said:

Commenting on the results, Niall O’Grady, Head of Marketing, permanent tsb bank said; “These figures put the reality of what is happening in the housing market in Ireland into context. After a decade of exceptional growth, house prices have reduced in the first six months of this year by just 2.6% - significantly less than many people were anticipating. The picture of course varies sector by sector but on the whole over the past six months, the market has been adjusting well to a higher interest rate environment. Importantly the fundamentals of a strong economy and strong demographic growth remain in place and will continue to underpin the market into the future.”

Trying to project this small fall into the future and predicting a major crash is baloney. In the past week alone the price of oil has fallen by 10%. If it keeps falling at the same rate, by Christmas it will be free.