Irish national house prices fell 10.1% to end August 2009 compared to 6.0% drop in the same period in 2008

Average Irish national house prices fell 1.5% in August according to the latest edition of the permanent tsb / ESRI House Price Index.  This compares to reductions in July (-1.1%), June (-1.5%) and May 2009 (-1.3%). In the first eight months to end August 2009 national house prices have fallen by 10.1% which compares to a reduction of 6.0% in the same period in 2008.

Measured over the 12 months (year on year) to August, national prices were down by 13.0%. This compares to a decline of 12.5% recorded in the 12 months to July 2009.  The average price for a house nationally in August 2009 was €235,260, compared with €261,573 in December and a peak of €311,078 in February 2007. National prices have fallen 24.4% since this price peak.

Commenting on the results, Niall O’Grady, General Manager Business Strategy, permanent tsb said; “The rate of decline has been has been more dramatic during the summer due to low activity in the market and no confidence in any recovery this side of 2010. Recently prices have started to fall faster in the Dublin region due to the high level of surplus stock available”. 

The permanent tsb house price index is a 3 month moving average. The index is based on the agreed sale price and is calculated using data from mortgage drawdowns. Therefore a lag may exist between the time the sale price is agreed and when the mortgage is drawn down.

There is no data on volume change from month to month -  - a key drawback.

Paper by David Duffy of the ESRI, published in May 2009

It has been argued that the index likely understates house price falls.

Dublin V Rest of Country:

Dublin house prices fell by 1.9% in August while there was a reduction of 2.4% for houses outside Dublin. In July the relative price changes were -2.2% and -1.2%. House prices were reduced by 18.0% and 12.1% in the twelve months to August 2009 in Dublin and Outside Dublin respectively. The equivalent rates to July were reductions of 17.1% and 11.1% respectively.

Through the first eight months of 2009 prices in Dublin and Outside Dublin fell by 12.6% and 8.7% respectively. The average price for a house in Dublin and outside Dublin in August was €306,795 and €204,524 respectively. The equivalent prices in December were € 351,096 and € 223,984.

Note that 3 Bed Semi, First Time Buyers V Second Time Buyers, New V Existing Houses and the Commuter price indices are currently not available due to the low sample size. The permanent tsb house price index is a 3 month moving average. The index is based on the agreed sale price and is calculated using data from mortgage drawdowns. Therefore a lag exists between the time the sale price is agreed and when the mortgage is drawn down.

- WWW.FINFACTS.IE, House Prices Survey