Sherry FitzGerald research for the three months ending June 30 indicates that the correction in house prices continued during this period, although at a much reduced pace than that witnessed in the first three months of the year.
The key highlights of the research are:
• National house prices fell by 5.2 per cent during the second quarter of the year which is significantly less than the 8.3 per cent of the first three months of the year.
• Galway house prices fell by 3.8 per cent in the second quarter compared to a drop of 7.3 per cent in the first three months of the year.
• From the peak of the market in 2006, house prices in real terms have fallen by 37 per cent nationally.
• The price correction has encouraged consumer confidence, with more people buying in the second quarter compared to the previous quarter. Undoubtedly this cohort of people is seeking value and getting value.
• The months of July and August have shown evidence of further increase in viewing levels and many more sale transactions actually happening.
• Significantly, fewer vendors are putting their houses on the market, hence the stock of available second hand properties has stabilised and has indeed noticeably tightened in Galway city.
• Viewings levels have significantly increased.
“The market began to witness an increase in viewing levels in the second quarter of 2009, which has gradually translated into an uplift in the number of transactions,” said Tony Kavanagh of Sherry FitzGerald Kavanagh. “Furthermore, the limited supply of new properties coming on the market in Galway has resulted in an erosion in the choice of second-hand stock available. As such the emerging evidence appears to suggest that the property market is showing signs of stabilising.
“There is no doubt that current house purchasers are prudent and thrifty. Equally, they are conscious that the cost of living is down, interest rates are at an all time low, which makes purchasing more affordable. Moreover, for many there is now value in the Irish house market and evidence of more ‘sold’ signs appears to be giving viewers more confidence in committing to purchase.
“It is now almost three years since what has turned out to be a very difficult phase for the Irish housing market began, with first reports of house price inflation moderating appearing in October 2006. We have seen an Irish price correction followed by an international price correction, and there is no doubt that this has been very painful for many consumers, but at the same time, the correction is contributing to the much needed restoration of competitiveness of the Irish economy.”