MyHome.ie Property Barometer Q4 2009

The latest property Barometer from Ireland’s leading property website MyHome.ie, forecasts a further 10% decline in asking prices in 2010 in its residential property outlook for the year ahead.

Key Points

• The market for three bedroom semi detached homes in the capital will be the first to show signs of asking price stabilisation in the latter part of the year.MyHome.ie forecasts that the apartment sector will be one of the last to show signs of stabilisation due to an overhang of supply, weak demand and NAMA
• MyHome.ie forecasts a  -10% average decline in asking prices in 2010
• The economy is forecast to exit recession in the second half of 2010 but the construction sector recovery will lag the overall recovery by up to twelve months.
• The construction sector is forecast to build just 11,000 new private housing units in 2010, with the possibility  of only 6,000 new private housing commencements
• Summary of Asking Price Changes in 2009
  
• National    -14.6%
• Dublin         -18.3%
• Ex Dublin    -12.7%
• New Homes    -15%
• Second Hand    -14.6%
  
• Rate of decrease in asking prices slowed both nationally (-3.5%) and in Dublin (-4.1%), when compared to Q3 2009 figures on the Barometer
• In Dublin, asking prices now down by -30.7%, and by -24.77% nationally since the peak.
  

The property outlook report predicts that the market will see some sectors showing signs of stabilisation in the second half of next year with three bedroom semi detached homes in Dublin likely to be the first to see prices stabilise. As a result of the price falls in the three bedroom semi detached market in the capital, and the subsequent narrowing of the gap between these prices and apartment prices, first time buyers are already favouring the more traditional type starter home over apartments. For almost a decade, first time buyers were virtually priced out of the three bed semi market in Dublin having to choose similar properties in the capitals commuter belt or apartments in the city, but now prices for three bed semi detached homes in the capital are back within reach for many first time buyers, and this improved affordability combined with a relative shortage of this type of stock for sale will contribute significantly to prices stabilising more quickly than in other areas and for other property types.  In addition, the transfer of loans to NAMA this year, many of which were granted to finance apartment developments or sites with planning permission for apartments, will mean uncertainty around the future prices for apartments will overshadow the market. In terms of demand, first time buyers will be attracted to properties that do not have annual service and management charges attached, have better parking and more garden space.

The report also forecasts that private housing output will decline to 11,000 units nationally and new private housing commencements could fall as low as 6,000 in the current year.  The report acknowledges that whilst the economy is forecast to move out of recession from the middle of the year onwards, a true “bottoming out” for the residential property market will only happen once unemployment peaks and employment levels return to growth again.

The Myhome.ie asking price barometer which measures changes in asking prices on a quarterly basis, recorded a 14.6% reduction in asking prices in 2009 at a national level, whilst the Dublin Index recorded an 18.3% fall in asking prices in the same period.  Overall prices in the capital are now 31% below their peak levels with the average asking price in the capital now at €370,137.

Commenting on the results, economic consultant to MyHome.ie Paul Murgatroyd said “2010 has the potential to be a better year for the residential market relative to 2009 and asking prices are likely to fall a further 10% this year but the rate of decline will ease compared to last year and as the year progresses some sectors of the market will begin to show signs of stabilising, notably the three bedroom semi detached market in the capital.  He further added “The economy is already beginning to stabilise and the creation of NAMA, improved affordability and a levelling off in consumer confidence will all help the market in the later stages of the year but the risk of higher interest rates, the impact of negative equity on mobility in the market and the prospect of further job losses will all weigh heavily on the market”

Angela Keegan, Managing Director of MyHome.ie added “2009 will be long remembered as the worst year in the Irish residential property market but things will improve in the year ahead. Already this year we have noticed a marked increase in active sales leads to estate agents via our website when compared to the autumn, and it is reassuring that potential purchasers are actively searching for property so early in the year”. She continued “there is definitely a cohort of people, mainly first time buyers, who have been taking a “wait and see approach” who now feel that prices are close to the bottom in some locations and as a result they are stepping up their property searches.   
   

The MyHome.ie Barometer is compiled from asking price data collected from a quarterly snapshot of active, available properties for sale on MyHome.ie. This data has been processed using best practice statistical techniques to produce a weighted average of the key indices.


Report Downloads

• Full MyHome Property Barometer Report Q4 2009
• Introduction
• Economic & Property Market Outlook 2010
• Key Highlights
• Market Analysis
• New Homes Market Analysis
• Urban Spotlights
• County by County Analysis
• Indices and Methodology

ENDS

Contact Details and Further information from:-
Paul Murgatroyd               
Economic Consultant to MyHome.ie      
Mobile: 0876998884             
e-mail: paulmurgatroyd@gmail.com

Angela Keegan
Managing Director
Phone: 01 8279400