RECENT INTEREST rate cuts by the European Central Bank have seen housing affordability improve but have not attracted buyers into the market, according to a new report today.
The Permanent TSB/ESRI house price index found that prices paid for residential property nationally fell by 9.6 per cent during the year to the end of November.
This brought the average price paid for a house nationally in November to €264,026. In comparison, the average house price in December 2007 was €287,887.
Last month saw house prices fall 0.5 per cent, following declines of 0.8 per cent in October and 1.1 per cent in September.
Niall O’Grady, general manager with Permanent TSB, said the benefit of recent interest rate reductions has been confined to existing mortgage holders. “The improved affordability for potential purchasers is significant but there are no signs that buyers are coming back to the market due to the current economic uncertainty.”
Prices for houses in the commuter counties of Louth, Meath, Kildare and Wicklow have recorded the most severe declines and have fallen 13.5 per cent over the 12 months to November. Average prices dropped 2.5 per cent in these counties in November to an average of €280,003. This compares with an average price of €321,403 in November 2007.
Prices for properties aimed at the first-time buyer market declined 1.9 per cent in November and are 12 per cent lower than November 2007. The average price paid by first-time buyers last month was €230,094, over €30,000 less than 12 months ago.
For second-time buyers prices have dropped by 8.9 per cent over the last 12 months and were static last month. Purchasers of a second or subsequent property paid an average of €297,562 last month, compared to €321,498 in November last year, according to the report.
Mortgage lending has come to a near standstill, according to recent data from the Central Bank. In October the value of residential mortgages issued was just €26 million. Mortgage lending is growing at just 7.6 per cent, the lowest rate in 20 years.
