Irish property prices have overcorrected by 12 to 26 percent

Home are now being sold at an undervalued price according to the Central Bank

Irish Voice Reporter,

Published Friday, May 4, 2012, 7:47 AM

Updated Friday, May 4, 2012, 7:47 AM

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Irish homes now being sold at an undervalued price

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The Central Bank said Irish property prices have overcorrected by between 12% to 26% compared with the fundamental value of properties.

Questioning why Irish property prices continue to decline, the bank suggested a lack of consumer confidence and expectations about further price falls is holding back purchases.

But it also said that a lack of mortgage finance from banks is restricting market activity and price levels.
The bank warned that any immediate revival of the sector still appears to be some way off.

Central Bank research said that as it enters its fifth year, the severe downturn in the residential property market has already become one of the Organization for Economic Cooperation and Development’s (OECD) largest and most protracted.

The Central Statistics Office residential property price index shows that the decline in value since the peak of the market in 2007 was over 47%.

The research points out that Ireland's housing prices have fallen for 16 quarters in row, but this compares to 82 quarters in Japan and 41 quarters in Switzerland.

The Central Bank points out that a positive trend in the housing market is the fact that affordability has improved in recent years, but it adds that the imposition of tighter credit conditions by the banks could diminish much of this benefit.

Meanwhile, The annual rate of decline in loans to households eased to 3.9% in March from 4% in February, latest figures from the Central Bank show.

The bank said that a drop in lending for house purchases and consumption again accounted for much of the overall reduction in lending.

Lending for house purchases was 2.4% lower in March, while lending for consumption and other purchases fell by 8%.

The Central Bank says that loans to households declined by €167 million in the month, following a net monthly fall of €355 million in February.

Nster.com

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sirpeter | May 06, 2012, 05:26 AM EDT

"I may have to spend the rest of my life in the U.S,but I at least have one"~That says it all really Paddy.I heard it many times before.You failed to cut out a decent living for yourself in Ireland and that's about it Paddy.Pound to a penny you have nothing but a two-bit job and have to work your ass off for every cent.Successful people want to give employment and see everybody doing well.They don't gloat at the unemployed.Why come on here with your bulls*it?.Go down to the homeless shelter where you live.Those unfortunates will make you feel a lot better about yourself.

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Curitiba | May 04, 2012, 06:52 PM EDT

Lack of work, exactly, LoyalCitizen. It was madness to try and sell homes at €300,000 each in area where the average wage was €250 pw. These properties are essentially worthless. I remember 10-15 years ago, there were houses for sale in Newcastle, England for a pound, and in parts of Manchester you could buy a whole street for two grand. I think Ireland is heading that way. Not so much in Dublin, but certainly in the smaller towns.

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Eamonn12 | May 04, 2012, 09:31 AM EDT

Pure propaganda. Real estate prices in Ireland are still overvalued. I predict another drop of 20-30%.

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LoyalCitizen | May 04, 2012, 09:04 AM EDT

Over corrected......... Pull the other one............Talking up the market means the retards of Ireland still do not realise the difference between right and wrong.............Until the retards of Ireland are dealt with, the prices will continue down.............In the years to come you will not be able to give away some homes in Ireland because of the lack of work.

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