House prices fell by 0.8% in February - IT

House prices fell by 0.8% in February

The average cost of a home fell 0.8 per cent last month, bringing to 1.5 per cent the overall reduction in house prices for the first two months of the year.

However, the latest permanent tsb/ESRI House Price Index appears to indicate a slowing in the rate of decline in house prices, as the monthly average fall in the last quarter of 2007 was closer to 1.3 per cent.

For the year to February 2008 house prices were down almost 9 per cent the survey found. In February the average price paid for a house was €283,650, with homes in Dublin selling for an average of €390,877, down 1.1 per cent in the month.

Buyers were paying an average of €243,826 for a house outside Dublin, down 1.3 per cent on the month and 8.9 per cent in the year.

Niall O’Grady, permanent tsb’s marketing manager, said the rate of price decrease over the first two months of the year “is lower than many people might have expected”.

He suggested that sellers “are finally grasping the point that people are interested in buying properties if the prices sought are realistic.”

First-time buyers were paying an average of €254,697 for a property in February, down 1 per cent on the month and 8.9 per cent on the year. Second-time buyers were paying an average of €317,970, according to the survey, a fall of 0.4 per cent in the month and 8.8 per cent in the year.

Sounds like it will be over 10% for the year

yep, but still “lower than many people might have expected”! if we count inflation, roughly what % drop would that constitute so far?

Niall O’Grady

I would suggest that the first of these statements is bull**** as anything the ptsb pay for can be tainted by their thinking plus exactly how many houses sold in January and February when the EAs were gearing up for the Spring sales ( :laughing: :laughing: sorry I cant help it).

As for the second statement sellers overall are not anywhere near realistic pricing and both they and EAs need to get together and get realistic about the price of houses and stop asking for silly money which they will not get and all of this will simply drag out the downward spiral over more years than it should.

Indeed. :unamused:

14% YoY to end Feb inc inflation is a serious drop.

Funny how that’s never the way it’s reported … ??? :imp:

10% nominal down this year with inflation @ 4.5% would bring us to circa 28% real HP drop.

There is absolutely nothing coming down the pipe to change this trend, and I include Tom’s 2 x 0.25 rate cuts - even if that does happen, it will not reverse the market’s momentum in returning to a sustainable level.

If we take the countrywide average valuation and discount back using the 2007, 2006 and 2005 inflation rates per the CSO’s website, we end up with a figure around the same as the average value at December 2004!

So effectively prices are already back to 2004 values in real terms.

Given the obsession with property in Ireland, I’m surprized there was no mention of the figures on RTE tv news.

wonder how many properties this is based on? Can’t imagine many sold during January/February

It’s based on asking prices and I think the number is 600.

Where did you hear that 600 number TUG?

I read it somewhere today, can’t think where… But it’s stuck in my mind…

I might be inventing it! :blush:

:confused: This is really causing me some serious trouble! Everyone I speak to has a different opinion, buy now as prices won’t shift too much, don’t buy yet as you may get 3 bedrooms as opposed to 2 or a few years off your mortgage if you wait… :confused: I do not know what to do.

I am still house hunting and to be honest will be forced to SETTLE for somewhere as my ideal home is outta my price range but it beats renting. I am no way going to live in an apartment as people in Dublin have not grasped the concept of saying hello to your neighbour or having communal get togethers like in Spain and Italy…its very stange, also, I refuse to be held to ransom by some proprty management co. I have €380 to spend and I just don’t know what to do as I seem to be looking at properties further and further away from Dublin. I know that our first house will never be ideal, I would like somewhere I actually like, also somewhere big enough to have a lodger (part of terms of mortgage :cry: ) without really noticing them being there!

Anyway, I am curious to know would you advise me to jump onto housing market now or wait and see what pans out later?

CeeCee

To better understand your predicament we would need to understand why buying would beat renting?

Cee Cee , I wonder why you say “better than renting”, what is wrong with renting?

You say you have 380K to spend. so if a bank is willing to lend you 380K they would be expecting about 18-20K a year back in interest only. If you can afford to spend this amount of money on interest you could afford to spend this amount of money on rent and rent yourself a nice house in Dublin.

Speaking of which, there was a curious piece in today’s Indo property section, hidden among all the CIF & Cape Verde spin.

Link

Ah Cee cee - you’ve come to the right place for unbiased opinion :wink: with this one.

But renting isn’t really so bad. I’m in the same position - anxious to buy but renting is relatively cheap compared to a mortgage. The lost money renting won’t compare to the mortgage repayments and the negative equity you’ll get into. Even if you take the most optimistic of figures for the coming year renting is still better and you won’t lose you first time buyer status until the time is right

Cee Cee before righting of renting as an option I’d swat up on the various pros / cons of renting versus buying and be open to the idea that it is possible to be financially better off by renting. Check this out and play with the calculator courtesy of the NY Times. I know there seems to be some form of bizarre social stigma attached to renting but I suspect the social stigma attached to being bankrupt or having your home repossessed will be worse.

I was always told that renting is dead money yadda yadda, also, I have rented some places that seemed grand upon first inspection only to find damp, mold and sewerage problems - I realise that these problems are better to be a landlords headache and not mine. I just kinda wanted a house, a garden and a dog :laughing:

I can only get €280 from bank, the rest is from savings and few quid from parents, basically I should keep my cash in my pocket and continue to rent then?!

CeeCee - have a look at daftwatch.atspace.com/ . You will see the number of houses for sale there has rocketed in the last year (and rental property is rising fast as well). Remember the fundamentals of the dismal science IE economics and your Supply v Demand curve.

INHO when you see that chart starting to plateau for at least 3 months, or indeed drop, that is the time to buy.

Well, if you are going to borrow €280k from a bank, you will be paying around €1,200 per month in rent anyway.