ASKING PRICES FOR residential property fell an average of 5.1 per cent in three months, their steepest decline in 18 months.

The Q2 report by daft.ie on national property prices shows that the average asking price is now half what it was in the peak of 2007.

The county with the steepest decline in prices between Q1 of 2011 (the period January to March) and Q2 (the period April to June) is Offaly. It experienced an 11.7 per cent drop over the last three months. Donegal, (down 9 per cent), Cavan (down 8.9 per cent and Waterford City (down 8.8 per cent) had the next largest drops.

Dublin experienced an average of 5.7 per cent in prices over the three months of April, May and June, with Cork, Galway and Limerick cities suffering similar drops of between 5 and 6 per cent.

While all counties experienced an overall drop in residential property prices, some such as Kerry (1.6), Meath (1.8), Mayo (2 per cent), Leitrim (2.1), Westmeath (2.2) and Carlow (2.5) had a much lower rate of decline.

Constantin Gurdgiev, head of research and strategy for St Columbanus IA, said that the data in the daft.ie report “clearly shows that there is some room for continued significant losses in residential real estate”. He said:

Across all geographies covered in today’s report, asking prices continued to fall and these falls are accelerating once again. Nationwide, asking prices are down 5 per cent in three months through June 2011 – the steepest quarterly decline in 18 months.

In an introduction to the report he said that several factors were combining to hamper economic recovery and meant a “bleak forecast for Irish property markets both commercial and residential going forward”. The “vicious cycle of low yields and collapsing capital gains still has room to run before Irish property markets can see a sustained stabilisation,” he said.

Daft.ie economist Ronan Lyons said that at a very basic level, the “sheer volume of properties” and the difficulty of securing a mortgage were weighing heavily on the market. He told TheJournal.ie:

One thing that has changed in the last few months is the introduction of distressed property auctions which have begun to show what the realistic price level is. The fall in prices has sped up in the last couple of months and that could be increased realism on the part of sellers.

Lyons said that Dublin city centre could stabilise as early as the first half of next year. Prices there fell by 3.9 per cent in the last three months but this was a smaller fall than in other areas of the capital.

Some of the figures in the daft.ie Q2 report for 2011 include:

• Prices in Dublin in June were 51 per cent lower than they were in mid-2007; in Limerick, prices went down by just one-third in the same period.
• Around 60,000 properties are for sale in the country.
• However, houses are staying on the market on average one month LESS than they did in Q1. But the wait to sell differs vastly across the country, ranging from four months in Dublin to up to 14 months in Connaught and Ulster.
• The year-on-year fall in asking prices was 16.5 per cent in June, up from 14 per cent last November.
• The average asking price for a three-bed house ranges from €349,000 in south Co Dublin to €119,000 in Roscommon.
• The average price of a residential property in June was €196,000 – that’s down 47 per cent from 2007.
• On a province-by-province breakdown, asking prices in Leinster fell by eight per cent or more during the period of May to June. Time-to-sell has fallen from 10 months in Q1 to eight months. Asking prices in Munster fell by close to five per cent on average, with time-to-sell reducing from 12 months in late 2010 to nine months now. Connaught and Ulster saw sharp falls of between eight to nine per cent between Q1 and Q2. It takes longer to sell a house in these two areas than anywhere in the country – the average property sits on the market for just over a year.

This map shows the drop in the average residential property comparing Q1 with Q2 (Click here for bigger version):

Meanwhile, MyHome.ie also reported a steady decline in residential property prices in a report on stock on their website. The report found that asking prices are down by an average of just under eight per cent nationally in the first six months of the year. Angela Keegan, MD of MyHome.ie, found that the national asking price for a new home was €235,000, putting prices “back at levels last seen a decade ago”.