The woes of the Euro

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House prices in Ireland down 53% from 2007 peak

June 7, 2011 -- The decline in house prices in Ireland is accelerating with apartments now worth just 53% of their peak price in 2007, government figures show. House prices in Dublin are down 46% and outside the capital the drop is 36%, the Central Statistics Office said. The collapse of value in apartments is being put down to over-supply and the continued lack of mortgage lending by the main Irish banks, even after the bailout.

Stephen McCarthy, managing director of Space estate agents believes the true picture is worse. He joined UK auctioneers Allsop for a mass auction of distressed properties in April and is planning a second one on 7 July with 87 properties going under the hammer, including a six-bedroom house in Dublin on Ailesbury Road, Ireland's most expensive street. It has a reserve of €1.45 million (£884,000). A similar house on the same road was bought by bust property developer Derek Quinlan in 2007 for €8.5 million.

"There's a lagging indicator with the figures. The auction in April shows that house prices were down 47% on peak. Property is certainly down more than 50% on average in Dublin," said McCarthy. "Recovery won't happen until the banks start lending again." He said for the first time in living memory it was now cheaper to buy than to rent but "Mr and Mrs Murphy just can't borrow the money". The CSO's Residential Property Price Index shows that property prices fell by 1% in April compared to a decrease of 0.7% in April last year. The annual figures show the decrease in value is accelerating.