Asking prices for Waterford city and county continue to slide, according to the House Price Report Review for 2008, but by roughly half the national average.

According to the review, city asking prices fell by 7.4 per cent while prices in the county dropped by 8.2 per cent – both figures representing two of the less severe price dives experienced across Ireland.

The average city asking price came to €255,171, while the county asking price for the past 12 months stood at €291,868.

It’s also interesting to note that prices in the city have fallen by just eight per cent since their peak price was achieved. Only Limerick city achieved the same, relatively small drop in comparison to the other cities.

Taking a four bedroom house in both local jurisdictions as examples, the asking price for such a property in the county last year was €357,000, with the same sized home in the city just €1,000 more expensive.

Assessing the overall picture, economist Ronan Lyons described 2008 as “the annus horribilis” for the property market which, nationally, saw a 15 per cent decline in asking prices.

“Over the past few years, Ireland has built perhaps twice as many houses as it needed, due in large part to tax incentives,” writes Lyons.

“Between 2005 and 2007, a quarter of a million new homes were built in a country that only had 1.4 million households in 2005. Worse still, due to the nature of the tax incentives, many of these properties were built in areas that did not need them.

“It stands to reason that if you build twice as many houses as you need for three years, you’ll need to build half as many as you need for six years to get back to equilibrium.”

He added: “Over the past decade, Ireland was a star in the world economy. Bursting onto the scene in the late 1990s, we earned worldwide recognition for how much we achieved so fast from such humble beginnings.

“With all this fame, it was perhaps to be expected that we lost our way in the early years of this decade…

“Nonetheless, like any star, while a lot of damage has been done, with good management, we can look ahead and spot elements of a brighter future – just look at the cost of petrol, mortgages, food or clothing now compared to a year ago.

“Ultimately, with the resolve to put right what needs to be fixed, and with a far better starting than we had in the mid-1980s, we have to be confident about our prospects for the future.”