Jul 3, 2007
Sherry FitzGerald, Ireland’s largest estate agents announced today (Monday) that the average price of a second-hand property in Ireland eased back by minus 1.6% during the second quarter of 2007, with the results for the year to date coming in at minus 2.7%.
This follows growth of 18.1% in Ireland during the calendar year of 2006.
Sherry Fitzgerald did say that if the Dublin market is excluded from the analysis the market shows a more static performance with prices rising by 0.01% during the second quarter of the year and 0.25% in the year to date.
House prices eased further in the Dublin second hand market in the second quarter of the year with prices falling back by 3.0%, bringing the results for the year to date to minus 5.2%. This follows very strong growth during 2006 when the market expanded in price terms by 22.2%.
Cork also saw a moderation of price growth in the year to date with prices falling by 0.3%
Commenting on the results Marian Finnegan, Chief Economist, Sherry FitzGerald Group said; “The results of the barometer largely reflect the continued impact of reduced consumer confidence in the performance of the market in the year to date. This loss of confidence was initially instigated by the furore over stamp duty but was further eroded by the rising interest rate environment. That said the fundamentals underpinning the market remain sound, a factor which will underwrite the market in the medium term.
The poor price performance was by no means standard throughout the country with some coastal locations such as Donegal and Wicklow benefiting from a combination of cross border demand and a healthy holiday home market allowing prices to continue to rise.”
Although there has been uncertainty in the second-hand market first time buyer demand remained surprisingly resilient with 33% of all sales bought by the cohort. Investors also remain very active purchasing 18.6% of all second hand properties in the year to date. The continued resilience of investor demand is perhaps reflected in the positive rental inflation in the private rented market- the CPI index of private owned rents rose by approximately 12% in the twelve months to May 2007.
An analysis of the profile of vendors who sold their property through Sherry FitzGerald in the year to date reveals that 28% of vendors were selling investment properties. Furthermore, approximately 23% of vendors sold with the intention of purchasing a larger property. This is a very healthy indicator of the wealth levels in the market. Finally approximately 26% of vendors were selling their home to relocate to a different county within Ireland.
Looking to the future Ms Finnegan purports that; “Despite the prevailing interruption in market performance we remain confident that the future of the Irish residential market remains sound. The combination of the recent legislation on stamp duty which will end speculation about future tax rates, the strong expansion of the Irish economy, good employment growth, robust migrant demand together with healthy rental inflation all indicate that the Irish residential property market is fundamentally very sound.”