Property prices may have hit rock bottom

Sunday 06 January 2013 18.10
House prices up by 1.5% in  Dublin in 2012
House prices up by 1.5% in Dublin in 2012

Dublin house prices rose for the first full calendar year since 2006 but the rise was only 1.5%.

With the latest unemployment statistics showing a negligible change in the numbers on the live register along with the continuing lack of mortgage finance for first time buyers, economists are predicting no major change in 2013.

However the latest statistics from Sherry Fitzgerald estate agents suggests the market may have reached its bottom.

Notably, results from the fourth quarter of 2012 reveal that the average price of a second-hand property in Dublin rose by 3.3%. This compares with a drop of 3.2% in the same period in 2011.

According to figures released in November by the Central Statistics Office, the falls since 2007 still confirm one of the worst property crashes in the world with house prices in Dublin 55% lower than at their highest level in early 2007 and apartments in Dublin are 63% lower than they were in February 2007.

The last six months of the year however showed an inching up of house prices. Notably, house prices nationwide rose during the last three months of the year by 1.4% compared to a drop of 3.5% in the same period in 2011.

About half of this was owing to changes in the capital - when Dublin is excluded from the national figures, it reveals a decline of 0.7% in the quarter and a decline of 8.6% in the year.

The Cork market saw prices fall by 0.7% during quarter four, compared to 3.9% in the same period in 2011. The annual results for Cork shows price deflation of 9.3%.

Sherry Fitzgerald says cash buyers are still the dominant force, responsible for 43% of all properties for which a sale was closed in the opening nine months throughout the county.

First time buyers however are also able to get finance, accounting for 29% of the properties traded in the year through Sherry Fitzgerald.

An analysis of the profile of vendors who sold their property through Sherry FitzGerald in the year to date revealed that 29% of vendors were selling investment properties. Approximately 10% of vendors sold with the intention of purchasing a larger property. Executor sales accounted for 21% of the market.