Second-hand house prices slide in Q1
Monday, 2 April 2007 11:23
Estate agent Sherry Fitzgerald says its figures show a 1.1% drop in second-hand house prices in the first three months of this year, following growth of more than 18% in 2006.
The fall was even sharper in Dublin, at 2.3%. The figures show prices rose by 0.2% in the quarter when Dublin was excluded.
Sherry Fitzgerald economist Marian Finnegan blamed ‘a reduction in consumer confidence in the performance of the market’ for the drop. She attributed this to higher interest rates and speculation about changes in stamp duty in the Budget.
A 2.3% fall in Dublin so far this year! We could be heading for a double digit drop across the capital for the full year.
I must confess I am surprised by the rate at which prices are tumbling. There seems to be no real evidence of price stickyness anywhere in Dublin.
You gotta remember that tens of thousands of people have remortgaged in 2004-2006.
They’re gonna be in negative equity if they don’t sell up now and clear their debts, having moved down the ladder if needs be.
And inventory is still growing in the peak the selling season, the ECB look like they may have three more rate rises in store for this year according to Bloomberg. The US is slipping into a housing bust and credit crunch induced ‘slowdown’. 10% fall in Dublin this year may well be on the cards.
A friend of mine was telling me the other day that now is a good time to buy as “prices will go up after the election”, with stamp duty changes and all that.
All the time the ECB are lobbing cruise missiles at the Irish property market I won’t be doing anything. When the noise has stopped I will crawl out of my bunker and take a look around at what is left behind. Until then I’ll batten down the hatches.
Three more rate rises in 2007 - rather optimistic/pessimistic - don’t you think? One in June is almost certain, a further one in September is possible but after that… Do you have a link to this offering from Bloomberg?