Asking prices fall sharply in final three months of 2011

Asking prices for residential property around the country fell by an average of 7.7% between September and December, according to the 2011 In Review report published by property website Daft.ie. This is the sharpest three-month fall in prices to date and means that the percentage fall in prices over the course of 2011 was 18%, as large as the fall seen in 2009. The average asking price is now just over €175,000, 52% below the 2007 peak of €366,000.

Between September and December, Dublin saw an average fall in asking prices of 8.9%, while the fall in Cork city was 5.4%. The average fall in Limerick was just 3%, while the fall in Waterford city was 7.7%. Of all the cities, though, the largest fall occurred in Galway city, where asking prices were discounted by over 14% in just three months. In the previous quarter, asking prices had actually risen slightly in the city. Outside the main cities, asking prices fell by between 7% and 8% in most parts of the country, except for Munster, where the average fall was 5.5%, which still marks the largest fall seen yet in the province.
New figures published in the report outline the speed at which properties are selling around the country. In Dublin, about one half of properties sell within six months, while in Connacht and Ulster, it takes a full year for the same proportion to sell. Across the country as a whole, properties that don’t sell within the first few months typically find it difficult to find a buyer in subsequent months: most will still be on the market after a year.
Tipperary & Munster
In Munster, asking prices fell by an average of 5.5% in the final three months of 2011, compared to a fall of 3.7% between June and September. The average asking price in Tipperary in late 2011 was €159,000, a fall of €124,000 from the peak.
Commenting on the report, Ronan Lyons, economist with Daft.ie said: “It is tempting to see larger house price falls as a bad thing and no doubt many, particularly those in negative equity, will see this dramatic fall in those terms. However, if the size of the correction in house prices is determined by fundamental factors, then it is better for the prices to race to the finishing line than crawl there. Looking ahead to 2012, confidence and finance are central. It is vital to remember that recovery in the property market does not mean an increase in prices, it means an increase in transactions. This is ultimately down to the banks, who will not resume lending until the Government’s stress tests stop punishing them for doing so.”
The full report is available from http://www.daft.ie/report and includes a commentary by Ronan Lyons, economist at Oxford University and author of the Daft.ie Report.

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