HOUSE PRICES CONTINUE TO DECLINE NATIONWIDE - Two reports this morning tell us average that house prices are still falling. The reports from property websites Myhome.ie and Daft.ie say that house prices have fallen by between 3-4% in the first three months of this year. They also say that the market is set to remain depressed.
Annette Hughes, from DKM economic consultants, has analysed the figures on behalf of Myhome.ie. Ms Hughes says 2011 is going to be another challenging year for the Irish property market and says there will be no evidence of recovery until the economy is on a sound basis. She says today's data show that house prices are down over 4% in the first quarter of 2011 and 13% in the year to date. She says that prices will continue to fall as long as consumer sentiment remains 'shaky' and people are unwilling to buy now in case prices fall further.
However, today's figures do contain some 'green shoots' of recovery. While the annual rate of decline remains in double digits in Dublin, the 15% fall in the lowest rate of decline in Dublin since the fourth quarter of 2008. She predicts that by the end of the year, the rate of decline in Dublin could ease to single digit figures. She adds that the transaction prices for houses - what the house actually sells for - have fallen much more from peak to trough than asking prices.
Despite the imminent ECB rate rise later this week, the changes in stamp duty and other Budget measures, Ms Hughes says that house prices are at their most affordable since the 1980s. She says a person has to look at their individual circumstances to see if it a good time to buy for them.
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MORNING BRIEFS - A report by property website Daft.ie has found that asking prices for homes fell by an average of 3.1% during the first three months of 2011. Daft.ie says the average asking price has dropped by 43% since the peak and now stands at €210,000.
*** After hitting two-and-a-half-year highs yesterday, world oil prices were lower in Asian trade today. New York's main contract was down 23 cents to $108.24 per barrel. Brent North Sea crude for May delivery fell seven cents to $120.99. Yesterday Brent went above $120 a barrel for the first time since August 22, 2008 due to the continuing unrest in Libya and positive US economic data.
*** Business activity in the country's services sector rose again in March, but the rate of expansion slowed over the month and was only slight. The NCB Services PMI gave a reading of 51.1 in March, down from 55.1 in February. Any figure over 50 signals growth.
*** An economic report from Ernst & Young has predicted that the Irish economy will suffer another sharp fall in output this year. Ernst & Young's spring economic forecast for the euro zone said gross domestic product in Ireland would drop by 2.3% this year, before returning to growth in 2012. It blamed the fall on a predicted unemployment rate of 15% and a 4.5% fall in consumption this year.
*** On the currency markets, the euro is worth $1.4204 and 88.13 pence sterling.
