The overall market for property in Ireland is down 36% from its peak in 2007. The news is worse in Dublin, where residential properties are valued at 46% below their highest prices, also in 2007. The National Asset Management Agency, created by the government to acquire and dispense with distressed properties, is considering offering incentives to buyers to help boost interest in the suffering housing market. Ideas include selling at a discount, or selling for a certain percentage lower than the value allowing the buyer to keep the difference if the market hasn’t turned around once the sale matures. For more on this continue reading the following article from PropertyWire.
Residential property prices in Ireland fell by 12.2% in the year to April 2011, up from the annual decline of 11.9% recorded in March, the latest figures from the Central Statistics Office.
But it is less than the annual decline of 13.7% recorded in April last year. However, nationally prices are still substantially below what they were at the peak of the real estate market in 2007.
On a monthly basis prices fell 1% in April, slightly less than the 1.7% fall recorded in March, but steeper than the 0.7% monthly price fall a year ago.
In Dublin residential property prices fell by 0.7% in April and were 13% lower than a year ago. Dublin house prices fell by 0.4% in the month and were 12.6% lower compared to a year earlier.
Dublin apartment prices fell by 1.8% in the month of April and were 14.1% lower when compared with the same month of 2010.
The price of residential properties in the rest of Ireland fell by 1.3% in April compared with a decline of 0.5% in the same month of last year and are now 11.7% lower than in April 2010. Overall it means that property prices in Dublin are now almost 46% lower than at their highest level in early 2007. Apartments in Dublin almost 53% lower than they were at the peak of the market in February 2007.
For the rest of Ireland residential property prices are 36% lower than at the peak of 2007. And nationally prices are 40% lower than the peak of the market in 2007.
The National Asset Management Agency, set up by the government 18 months ago to acquire risky assets, is trying to lure buyers back. The NAMA may sell homes at a discount, providing the value of the property falls further in the years after the deal, said spokesman Ray Gordon.
One option would be for NAMA to ask the buyer for 80% of the purchase price at the time of the transaction and only collect the remaining 20% if the market value remained the same or increased by a certain amount. If the value fell, the purchaser would have to pay only part of the outstanding amount or, in some cases, nothing at all.
‘The market needs a kick start. NAMA might be able to provide that,’ said Tom Dunne, a lecturer at the School of Real Estate and Construction Economics at the Dublin Institute of Technology.
Another problem is that mortgage lending has dropped about 95% from the market’s peak. The number of new mortgages granted in the first quarter fell 53% to 3,259 from a year earlier, according to the Dublin based Irish Banking Federation.
More than 300,000 households, or about 40% of mortgages, may end up in negative equity before the property market bottoms out, according to David Duffy, an economist at the Economic & Social Research Institute in Dublin.
This article was republished with permission from PropertyWire.