This article is from page 66 of the 2008-10-07 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 66 JPG
SHERRY FitzGerald, Ireland’s larg- est estate agents has announced that the average price of a second-hand property in Ireland fell by 5.9 per cent during the third quarter of 2008. The results for the twelve months to September show a price reduction of 14 per cent.
According to Marian Finnegan, Chief Economist, Sherry FitzGer- ald Group, “The true extent of the market correction is more significant than either figure illustrates. The first evidence of market correction began during the third quarter of
2006. Assuming the market peak occurred in June 2006, this suggests a market correction in Ireland of 16.6 per cent in nominal terms and 26 per cent in real terms over the 27 month period”.
The Cork market recorded price deflation of 4.7 per cent in the quar- ter and 12.7 per cent in the twelve months to September.The results for the Dublin market are even more marked with price reductions of 7.1 per cent in the quarter and 15.7 per cent in the year to September 2008. From a peak in June 2006, the aver- age price of a second-hand property in Dublin has now fallen by 23.4 per
cent in nominal terms or 32.8 percent in real terms.
Marian Finnegan, added, “The lat- est results from the price barometer give a clear picture of the extent of price correction in the second hand market. The price decline originated in the Dublin market during the sum- mer months of 2006 however it was almost twelve months later that the price reductions truly spread to the rest of the country. All areas of the country are now enduring significant price falls with the upper end of the market most affected to date’.
An analysis of the purchaser profile in the year to date reveals that first
time buyers accounted for 38 per cent, compared to 34 per cent during the same period in 2007. Not sur- prisingly investors were less active in the year to date purchasing 10 per cent of the properties traded in the period, compared to 17.6 per cent in the same period in 2007.
The trend of rental inflation which has been a feature of this market dur- ing 2006 and 2007 effectively ended in 2008 with the CPI index of pri- vately owned rents falling by 0.64 per cent in the twelve months to August 2008, compared to an annual average growth of 9.98 per cent in 2007.
Looking to the immediate future,
Ms Finnegan acknowledged that “Activity levels will remain subdued in the coming weeks leading up to the Budget as consumers await the Government’s announcement on October 14th. In the post —budget market other factors should begin to influence consumer sentiment. Not least of which lies in the fact that the combination of the price reductions already present in the market place and the reduction in fixed interest rates in the mortgage market has re- sulted in enhanced affordability in the starter home market with an in- creasing number of properties more affordable to purchase than to rent”’.