Residential property prices fell by almost 18 per cent in the year to February, new data from the Central Statistics Office showed today.
Over the month, prices were 2.2 per cent lower than in January.
The decline of 17.8 per cent showed an increase in the pace of decline from the previous month, when the annual decline registered 17.4 per cent, and the monthly decline was 1.9 per cent.
In Dublin, property prices were 20.3 per cent lower year-on-year, and 1.2 per cent down on the month. That compares with a 16.4 per cent decline in the rest of the country, and a monthly fall of 3 per cent.
House prices in Dublin fell by 0.7 per cent in the month, bringing them to a decline of 20.2 per cent over the year and 56 per cent lower than their peak in early 2007. Apartment prices fell by 22.9 per cent in the capital over the year, to 62 per cent off their peak.the most severe falls of any category.
"Tentative signs of a stabilisation in prices in this category that began to emerge in November 2011 have now been completely reversed as the annual rate accelerated to -23 per cent, the fastest rate since February 2010," Goodbody economist Juliet Tennent said.
The decline is yet another blow to consumer confidence.
“The bottom line is that consumers will want to see the housing market stabilising before they feel confident about the economy overall but we think prices have further to fall,” said Bloxham’s chief economist Alan McQuaid.
Across the rest of the State, residential property has fallen by 45 per cent in price since the peak of the property boom, with CSO statistics putting the average fall for the country at 49 per cent.
The CSO’s statistics do not take into account cash sales of properties. Anecdotal evidence from estate agents indicates a large number of sales are conducted in this manner.
"The CSO index excludes cash purchases and lags developments in the market," Davy chief economist Conall Mac Coille said. "These factors mean that the index probably understates the true peak-to-trough decline, which we believe is in the region of 55-60 per cent."
Davy Stockbrokers had previously said prices could decline by as much as 70 per cent, with the market showing no sign of stabilising.
Constraints imposed by banks on credit and a shrinking pool of potential first time buyers are expected to drag on demand for some time.
“We don’t see any significant improvement in the housing market until the employment situation gets better and bank lending returns to some sort of ‘normality’, which is still some way off in our view,” said Mr McQuaid.
He predicted another double-digit decline in 2012, with the current 10 per cent forecast likely to be outstripped, given the declines in the first two months of the year.
