HOUSE PRICES fell faster in February and March this year than in any month since July 2009, the Central Statistics Office has said.
Releasing the CSO’s first monthly Residential Property Price Index, Niall O’Hanlon, statistician with the official statistics body, said the figures pointed to “an acceleration in the rate of decline in recent months”.
Prices fell by 1.7 per cent between February and March. It was the third consecutive month in which prices declined by more than 1 per cent on the month.
The new figures show the fall in property prices accelerated in the first three months of 2011.
The index measured the change in the average level of prices paid for residential property in Ireland since 2005, based on the transaction prices. Figures from Dublin made up one-third of the market.
An average property price was not produced and no differentiation was made between house types. Residential property prices fell by almost 40 per cent nationally, from a peak in mid-2007. In Dublin, the drop was 47 per cent.
Apartments in the capital were worst hit, with prices dropping 52 per cent from the peak, which was reached slightly earlier in Dublin than in the rest of the country.
National prices fell by almost 12 per cent from March 2010 to March 2011, with prices in Dublin falling by 13 per cent. Again, apartments fared worst, falling by more than 15 per cent nationally over the 12 months, compared to 11.5 per cent for houses.
The data used by the CSO was supplied by eight Irish banks which passed over information when mortgages were drawn down.
The figures did not include cash transactions and measured prices in about 75 per cent of the market over the six years.
National prices grew at a rate of 1 per cent almost every month between June 2005 and March 2007. Between April and November that year, there was little movement. Mr O’Hanlon said the figures showed the property bubble “didn’t burst overnight. There was a plateau followed by a consistent downward trend”.
Also speaking at the launch of the index, Paul Crowley, head of price statistics and international relations at the CSO, defended the decision not to produce average property prices for the index.
“Average house prices are relatively meaningless; we can produce them, but they don’t mean anything,” he said.
He said taking averages in an extremely heterogenous market made data unusable. There was also no requirement to produce average house prices in a European context: “This demand seems to be purely Irish.” He said the data was divided into Dublin and the rest of the country because this was the most appropriate model. The collection of data was not helped by the absence of national post codes, he said.
Almost 20,000 residential properties were purchased in 2009, down from a peak of over 86,000 in 2006. These figures, based on stamp duty collected by the Revenue Commissioners, were not available for 2010. They also showed that, in 2008, some 30 per cent of residential property was purchased without mortgages, compared to only 6 per cent the following year.
The new index will be published on a monthly basis, with the next publication due in early June for transactions in April. It is likely to become the definitive index for Ireland and will also be used to fulfil a new EU data requirement that will compare residential property prices across member states.
Lender Permanent TSB and the Economic and Social Research Institute, which jointly produced one of a number of property indexes in the past, announced yesterday that, in light of the new CSO index, they would no longer produce their own.
In a joint statement, they said it did not made sense to continue to produce their own index when the CSO would be producing “a similar index based on a more comprehensive set of information”.
Friday, May 20, 2011
Property values falling at accelerated rate - The Irish Times