House prices down 50pc as further falls expected
WARNING: Banks must help or values will plummet even further
HOUSE prices have plunged by over 50pc since the peak of the boom -- and the sharp fall is unlikely to stop anytime soon.
Two surveys published today reveal a stark outlook for homeowners, with prices set to plummet even further this year as the eurozone debt crisis rages on.
The average asking price for a property is now just over €175,000 -- less than half of the €366,000 price tag homes fetched when prices reached their peak in 2007.
Experts have warned that unless banks start lending again to potential buyers and the economy experiences growth, prices will fall even further.
Property website Daft.ie has revealed that prices fell almost 8pc in the final three months of 2011, and a massive 18pc during the year overall.
And MyHome.ie reported that prices dropped by 13pc over the past 12 months.
The average price of a house in Dublin is now estimated at €268,000 -- a shocking 50pc drop since 2006. And some properties in the capital have fallen a dramatic 60pc in value.
Ronan Lyons, economist with Daft.ie, said that although people will see the drop in value of their homes as a bad thing, it is important that the market eventually bottoms out.
"It is tempting to see larger house price falls as a bad thing and no doubt many, particularly those in negative equity, will see this dramatic fall in those terms. But if the size of the correction in prices is determined by fundamental factors, then it is better for prices to race to the finishing line than crawl there."
Mr Lyons added that without finance being made available by banks, there is a risk prices could fall by up to 65pc before coming back. "This is down to the banks who will not resume lending until the Government's stress tests stop punishing them for doing so," he added.