“I’ve stopped buying newspapers,” a local businessman said to me last week, surely not including The Munster Express in such a statement.
“They’ve been filled with nothing but doom and gloom the last few weeks. There was a few of us around in the 70s and 80s and while things aren’t great at the moment, they’re nowhere near like what they were in the bad old days.”
Since assuming this property brief, it’s been difficult to find particularly jovial-toned words and believe me, I’ve tried.
Alas, dear readers, particularly those in possession of mortgages, you ain’t going to find column inches worth warming one’s palms over right here. Of course, if you’re an aspirant first time buyer, the current climate is evidently working in your favour.
Last Thursday’s permanent tsb/ESRI House Price Index for May indicates that the year-on-year price of the average Irish home has declined by 9.5 per cent.
If one combines this figure with the recent market assessment offered by Bloxham economist Alan McQuaid, house prices between June 2007 and December 2008 could fall by as much as 21 per cent. Now that’s a slump by any estimation.
Since the turn of the year alone, prices have fallen by 4.4 per cent. During May, the average price paid for a home was €275,176, which compares to the December 2007 average of €287,887 – a substantial drop of €13,000.
“The combination of higher customer mortgage rates and weaker confidence in the economy is increasing uncertainty about the immediate future of the property market,” offered Permanent TSB’s Niall O’Grady in reaction.
“This has resulted in lower demand thereby reducing transaction numbers and property prices.”
While all this is bad news for mortgage holders, who are anxiously casting an eye in the European Central Bank’s direction, first-time buyers are gaining greater property pickings.
While prices for ‘FTBs’ dropped by 1.2 per cent in May, the average price this particular group paid for a home during the fifth month of the year stood at €246,925, down from €260,786 before Christmas ‘07.
The average price paid for a new house in May came to €276,215, while the average second-hand home shifted for €274,716.
The study offered an interesting comparison on the price of three-bed semi-detached homes, with properties of these dimensions down 1.3 per cent in May, in comparison to the 0.1 per cent increase experienced in April.
In May ’08, the price of a three-bed semi stood at €292,496, down from the December ’07 price of €299,412.
So it’s good news for FTBs (if they can squeeze the cash out of a finance house right now) and bad news for the rest of us.