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10/1: Daft Report highlights dramatic shift in the housing market |
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While asking prices remained largely static, closing prices consistently fell changing the market from a seller's to a buyer's market. This shift combined with general uncertainty in the market led to a large build up in the stock of property available for sale, which peaked in September. The last three months have seen a small reduction in the stock, possibly indicating a tentative renewal of activity in the market.
Commenting on the report, Ronan Lyons, economist at Daft.ie, said "Daft.ie's figures show that asking prices were static in 2007, while the ESRI/permanent tsb index shows that closing prices fell steadily throughout the year. These two trends together mean that sellers can no longer expect to achieve 5-10% more than their asking price, as they might have up to late 2006. Now at the start of 2008 sellers are typically expecting 5-10% less than their asking price. Anecdotal evidence had suggested that many sellers were resisting offers below their asking prices for most of 2007. The recent fall in stock, however, may be the first sign that vendor expectations are adapting to the new situation."
In 2007, asking prices nationally were static in year-on-year terms, just 0.4% higher on average than the previous year. In Dublin, asking prices are 1.7% higher than a year ago, whereas in Dublin's Commuter Counties prices remain static. The average price for a property nationwide now stands at €353,000. The average price for a property in Dublin stands at €449,226, while for the other cities the average prices stand as follows: Cork, €378,562; Limerick, €259,243; Waterford, €278,353 and Galway, €328,726.
In her commentary on the latest Daft Report, Professor Frances Ruane, Director of the ESRI, provided an outlook for 2008, citing grounds for optimism but also reasons why consumer confidence will remain fragile. "Firstly, to the extent that the recent changes in stamp duty are seen as reducing uncertainty, they should lead to increased confidence. Secondly, while economic growth rates will be lower than in previous years, they are not low relative to the rest of the EU, and taken with the growth in the population seeking housing should have a positive effect on demand.
"On the other side, threats of increases in the ECB rate have not gone away, and this will lead buyers to be cautious. Furthermore, buyers may be affected by banks tightening their credit. The behaviour of builders and developers in releasing stock for sale will also be important in certain parts of the market. While many factors influencing the housing market remain positive, it is the level of confidence felt by consumers over the course of the year that will be crucial in determining the final outcome."
The full report contains an analysis of the housing market throughout 2007 on a county-by-county level, as well as an overview of regional trends and a commentary from Prof. Frances Ruane, Director of the ESRI. It is available online at www.daft.ie/report. |
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