Property Collapse of Ireland continues
So the property sector in many of the PIIGS countries is under severe stress, but how are property proces actually behaving? Ireland, one of the ex Tiger economies is experiencing the sharpest drops ever. With properties in free fall mood, asking prices fell by 7.7% in the fourth quarter alone. Many are now entering negative equity, and we all know what that means. The hang over period has just started. From Finfacts Ireland:
Asking prices for Irish residential property across Ireland fell by an average of 7.7% in the fourth quarter – - between September and December – - according to the 2011 In Review report published by property website Daft.ie. This is the sharpest three-month fall in house prices to date and means that the percentage fall in prices over the course of 2011 was 18%, as large the fall seen in 2009. The average asking price is now just over €175,000, 52% below the 2007 peak of €366,000.
Ronan Lyons, economist with Daft.ie said: “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. However, if the size of the correction in house prices is determined by fundamental factors, then it is better for the prices to race to the finishing line than crawl there. Looking ahead to 2012, confidence and finance are central. It is vital to remember that recovery in the property market does not mean an increase in prices, it means an increase in transactions. This is ultimately down to the banks, who will not resume lending until the Government’s stress tests stop punishing them for doing so.”
Full report here.