As we wait patiently for the ESRI/Permanent TSB to publish the new quarterly house price index (promised for April 2010), the tension mounts as we wait to see what has happened to actual sale prices since December 2009 when they dropped by 3.6% in one month alone which represented a 31.5% drop from peak values.
Recent reports on asking prices have indicated that prices are still dropping though at a more modest rate than previously. Certainly estate agents, CIF and others are talking about prices being 50% off the peak and indeed the ESRI might confirm that this is the case.
However there appears to be growing speculation that prices are about to take another tumble. Writing in today’s Irish Times, Jack Fagan cites property commentator Bill Nolan “The clear-out process is starting in earnest and the receivers and liquidators are getting fresh instructions daily – and you ain’t seen nothing yet.” He said that far from being an isolated incident, the recent fire sale of apartments in Mullingar indicates what receivers do.”
The Irish Independent carries an article today which suggests that activity is returning to manic levels as the receivers move in and as solvent developers lower prices to “realistic levels”. The article carries quite a few examples and features one where the asking price is now €125k compared with up to €300k three years ago.
And of course there’s NAMA who are apparently examining the first of the developer’s business plans right now and where there are indications that some property will be sold off sooner rather than later. The NAMA CEO told a recent Oireachtas Joint Committee on Finance and the Public Service that there had been many expressions of interest in putative NAMA assets. Although NAMA has not yet published its Code of Practices it is to be hoped that these first properties to be disposed of have adequate marketing exposure.
Whilst construction activity on new build homes continues at a modest rate, the immediate prospects for property prices don’t appear healthy. We should soon see the scale of emigration in 2009/2010 when the CSO publishes its annual population estimates. We have a large number of vacant properties for sale (estimates of between 35-350k). Calls for more wage reductions, rising inflation, interest rates, water and property taxes (or at least speculation about their introduction), at least €3bn to come out of the November 2010 budget would appear to tower over the good news from the increase in exports and the widespread predictions that the economy will return to growth at some point this year.
NAMA Wine Lake 