A tentative recovery in the residential property market has been set back after the Central Statistics Office (CSO) reported prices falling by 0.5 per cent across the State in December, and by more than twice that in Dublin.
Residential property prices, including both apartments and houses, fell by 1.3 per cent in the capital last month, while prices elsewhere in the State remained static.
Industry figures cautioned against reading too much into the decline which comes after a rise of similar proportions in November.
Angela Keegan of property website myhome.iesaid at least three months' data would be needed before a trend could be established, and she pointed to the exclusion of cash deals from the CSO figures which would inevitably skew the official data.
“December is a quiet month so you are looking at a very small number of transactions and through a very narrow lens,” she said.
“The recorded falls are very much what we expected, but I would not be reading too much into it.
Cash deals
“It is also important to note that the CSO does not include cash deals and they make up nearly 50 per cent of transactions.”
Owen Callan of Danske Bank Markets agreed, and described the December decline as unsurprising and “in line with a massive fall in consumer confidence in December”.
He said the dip in confidence “was not unexpected post-budget 2013”, and suggested that the “general theme of market stabilisation remain in place, albeit with the negative risks still quite evident, and sentiment remaining quite weak”.
In addition to the monthly decline of half a point, the CSO figures reported a fall of 4.5 per cent over the course of 2012, which does at least point towards a levelling off of the market.
While prices are falling they have at least slowed significantly – an annual drop of 16.7 per cent was recorded in the year to the end of December 2011.
Price decline
Dublin was worst hit by the price decline last month but the price of residential properties outside the capital was unchanged in December.
This reverses a recent trend which had seen Dublin prices performing better than those elsewhere across the State.
According to the CSO, house prices in Dublin are now 54 per cent lower than at their highest level in early 2007.
Apartments in the capital are 62 per cent off what they were in February 2007.
The fall in the price of residential properties outside of Dublin was somewhat lower at 47 per cent.
Overall, the national house price index is now 50 per cent lower than it was at the height of the boom in early 2007.
