With annual price erosion approaching 15%, Ireland’s real estate market is one of the poorest in Europe. Ireland’s economy is suffering from rampant joblessness and mounting debt, and the property market has been hit hard as a result. Although investors are eyeing a chance to cash in on Ireland’s woes, the likelihood of another year of falling prices stands in the way. See the following article from Property Wire for more on this.
Property markets in Ireland are among the most vulnerable in the world with prices in Dublin having fallen by 44% since their peak.
Analysts do not expect much of an improvement going into 2011 but some point out that the fall in prices is slowing slightly.
According to the Global Property Guide Irish prices were down by 14.94% over the year to the end of September, putting Ireland at the bottom of its house price league for 35 countries.
This comes in the wake of a report by credit rating agency Standard & Poor’s, which predicted in June that house prices in Ireland would fall by another 10% year before reaching the bottom in 2011.
It said high unemployment and economic weakness had meant that consumers would remain cautious this year, while an oversupply of houses had also contributed to price falls.
‘Ireland had the worst annual price decline among countries in the survey. Irish house prices have been falling for the past three years, and the declines show no sign of ending,’ said the GPG survey that uses house price changes after inflation to give the most realistic picture of the market rather than the upbeat nominal figures preferred by real estate agents.
According to the Knight Frank Global House Price Index Ireland’s ongoing economic turmoil is still reflected in the housing market. Prices in the three months ending September 2010 fell by a further 1.3%. This means that across Ireland house prices have lost more than 36% from their end of 2006 peak while in Dublin they are down 44% since the peak.
Liam Bailey, head of research at Knight Frank, said that despite the ongoing weakness in the market there is some better news in that the rate of price decline has slowed to 1.3% in the third quarter, down from 1.7% in the second quarter.
‘Irish property is being watched closely by investors keen to identify opportunities before the Market turns. It seems unlikely however that this opportunistic investment will really take off until the second half of 2011 rather than the first half,’ he explained.
Ireland is the world’s most vulnerable commercial real estate market because it faces the biggest gap in funding relative to its size for refinancing debt, according to consultants DTZ. The $6.5 billion shortfall for debt coming due through 2013 is equivalent to 16% of the value of Ireland’s commercial real estate investment market, it says.
Many Irish property loans are under water after what London based Investment Property Databank estimates was a 60% slump in the values of shops, offices and warehouses in the three years through to the end of September.
Kersten Mehl of the Irish Auctioneers and Values Association said the decrease in Irish prices was due to lack of credit in the economy.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.