Property prices have fallen by 68 per cent since their peak, significantly more than official figures suggest, a new report said today.

Tough credit conditions, an oversupply of housing and weak domestic demand have weighed on the residential property market in recent months, while a lack of transparency has helped draw out the property crash.

The report from Goodbody Stockbrokers shows property has fallen by 68 per cent from peak asking prices, based on property prices recently achieved at Allsop Space auctions. That compares with an average decline of 48 per cent nationally reported in the Central Statistics Office’s residential property index.

The Allsop Space auctions represent a small sample size, Goodbody said. However, the officially compiled residential property index excludes cash sales, and with an increasing number of anecdotal evidence from estate agents indicating that the real decline is far more severe.

Mortgage lending levels have fallen to a level that is "unsustainably low", Goodbody said. The number of mortgages drawn down in Ireland last year amounted to 0.5 per cent of the housing stock. That compares with 1.9 per cent in the UK and a long-term average of 3.6 per cent.

“Allied to tight credit conditions, housing oversupply and a weak domestic demand environment, the lack of transparency on sales prices in the Irish residential property market has contributed to the prolonged nature of the Irish housing market crash,” said Goodbody chief economist Dermot O’Leary. "People don't really have a true idea of what level transactions are happening at."

Unlike private sales, auctions do not face privacy restrictions. However, that is set to change this summer when the Government-backed house-price database is established. Due to be online by the end of June, house prices will be collated from the Revenue Commissioners, and will be searchable by address.

"Any element of knowledge and transparency has to help things," Mr O'Leary said.

The house price crash has also brought new value to the residential property market.

The price to income ratio has adjusted “significantly” the report said, and assuming an official figure of 60 per cent decline from the 2007 peak by the end of next year, the ratio will decline to 3.7x, compared with 8.6x in 2006.

Based on the current data from Allsop Space auctions, however, that ratio is currently at 2.8x. “Property prices often undershoot in a crash,” the report said.

The average rental yield is now 8.8 per cent, which Goodbody said indicated that prices are close to long-term value.