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Irish Housing Has Yet to Trough as Prices Decline, Report Says

A house for sale in north Dublin, Ireland. Photographer: Crispin Rodwell/Bloomberg
A house for sale in north Dublin, Ireland. Photographer: Crispin Rodwell/Bloomberg

Ireland’s housing-market slump has yet to trough in the wake of the recession, property website operator MyHome said, after two reports showed price declines continued in the third quarter.

Home values dropped 3.9 percent in the three months through September from the second quarter, when they fell 3.4 percent, the Dublin-based company said in a statement late yesterday. A separate report from property company Daft.ie today showed prices declined 3.7 percent in the same period.

House prices, which quadrupled in the decade through 2007, have plunged since then as the economy shrank, unemployment soared to a 16-year high and banks restricted lending. The lack of demand for property has curbed construction, which will continue to act as a drag on economic growth this year, Ireland’s central bank said yesterday.

“It is clear that we have not yet reached the bottom,” said Jean Goggin, author of the Myhome report and an economic consultant with DKM Economic Consultants in Dublin. “We will have to see an improvement in the labor market and the general economy before the property market picks up.”

Daft said the average cost of a home in Ireland has fallen 37 percent from its peak to an average 195,000 euros ($266,994). It also said that the total housing stock on the market remains at around 60,000.

“Reflecting the overhang of unsold stock and the weakness of demand conditions generally, commercial construction is likely to decline significantly this year,” the central bank said in its quarterly bulletin, when it cut its growth forecasts for this year and next. It also said further property-price declines are “in prospect.”

‘Mismatch’

MyHome said year-to-date prices are down 13 percent from a year earlier, compared with a 14 percent drop in 2009, indicating signs of stabilization. Daft said average selling times have shortened to 8.4 months from 9.1 months at the start of the year. Nevertheless, there is a “mismatch” between supply and demand that may keep prices in check, it said.

“Many would-be first-time buyers still lack either the confidence or the finance to enter the sales market,” said Ronan Lyons, an economist at Daft. “As a result, the total supply on the market still remains very high.”

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