THE PRICE of new homes fell by 2 per cent in April - more than double the rate of decline in second-hand homes - as developers sought to shift a backlog of unsold houses and apartments.
The latest edition of the house price index published by Permanent TSB and the Economic and Social Research Institute (ESRI) shows that average national house prices fell 1.1 per cent last month. This means the decline in the market has now re-accelerated.
The average price paid for a house nationally during the month was €278,500 - some 9.2 per cent lower than the average price paid in April 2007. House prices fell 3.3 per cent in the first four months of 2008, after a 7.3 per cent drop in the market in 2007. The index has now been falling for 14 consecutive months.
"While the trend of falling house prices continued in April, there is a clear sign of a more pronounced reduction in the price of new houses as sellers move to drive activity in this sluggish sector," said Niall O'Grady, head of marketing at Permanent TSB.
In recent months, there has been a flurry of marketing activity for housing developments that were completed last year but remained vacant and unsold, as developers attempted to sit out the dip in the market. In many developments, the properties that have gone on sale have done so at sharply lower prices than those sold in earlier phases.
Mr O'Grady said some properties are holding up better than others. Prices of three-bedroom semi-detached houses are down just 1 per cent on average on an annual basis and actually rose slightly in both March and April.
So far this year, house prices are falling faster outside Dublin than in the capital. In Dublin, prices fell 2.7 per cent in the first four months of the year to an average of €386,660. Outside Dublin, they have dropped 3.6 per cent to an average of €240,400. In Louth, Meath, Kildare and Wicklow, prices have fallen 3.7 per cent to an average of €309,400.
Prices for first-time buyers fell 4.2 per cent in the first four months of 2008, while the rate of decrease for second-time buyers was 2.7 per cent.
The publication of the Permanent TSB / ESRI data follows comments earlier this week by analysts at Davy Research, who said it was now unlikely that the housing market would reach the bottom of its current price cycle this year due to the tighter lending criteria for mortgages and the absence of any cut in interest rates.
