IRISH house prices could fall by as much as 30pc from their January 2007 peak, a new report claimed today.

New figures revealed by major firm Goodbody Stockbrokers have shown that property prices across the country are continuing to tumble, with the downturn in the economy impacting on house asking prices.

The stockbroker says that the property market has become so fraught that prices could fall to just two thirds of their value at the peak property market period of January 2007.

The latest monthly index |by Irish Life & Permanent shows that prices have already dropped 12pc since their January 2007 peak, with estimated prices expected to fall by 10pc |by the end of 2008 after a 7.3pc decline last year.

“Ireland does not have the problem of forced sales as yet, but our analysis of the stock of homes for sale does suggest a significant overhang of properties in the market,” explained Dermot O'Leary, CEO at Dublin-based Goodbody Stockbrokers, after the firm revealed the latest figures today.

Construction

“Irish house prices are tumbling and construction is contracting after a doubling of European Central Bank interest rates burst a decade-long |property boom early last year.

“The property slump has since deepened after the largest lenders raised rates and tightened loan-to-value ratios on mortgages in response to the seizure in credit markets.

“There are around 55,500 second-hand homes advertised for sale on Ireland's Daft.ie property website, according to O'Leary. Clearly, to reduce this stock, further price declines are needed, with more extensive reductions in the areas with the most acute oversupply issues,” he said.

The expected continued fall, which the stockbroker says is linked to the downturn in the economy and an over-supply of properties on the market, further supports previous statements noting the drop-off in house prices nationwide.

According to the survey, there are currently just under 55,500 second-hand homes advertised for sale on Ireland's markets.

The new figures show that there has been a steady downturn in the house price market over the last 20 months.

- Fiachra O’Cionnaith