The rise of the Celtic Tiger has been spectacular and the Irish property market has soared alongside the growth of this European nation. Following on from an IMF report in 2000 that stated that Irish property prices were unlikely to continue to grow strongly for long, house prices actually went on to triple between 2000 to 2006.
However, the beginning of 2007 saw demand for residential property begin to fall, and as a whole 2007 saw prices falling by 7.3% on average across the whole nation. During 2008 prices of residential property in Ireland continued to slide, and at the end of 2008 average house prices had dropped by a staggering 9.1%.
Taking into consideration the level of inflation of 4.1%, this gave a decline during 2008 in real terms of 13.2%. The average price of a house in Ireland at the end of 2008 was a whopping £228,000 - but this has dropped from £251,000 at the end of 2007. In this article we’ll give you a full update on the Irish property market so that you can assess for yourself whether now’s a good time to buy or sell property in Ireland.
The largest drops in Irish property values have been in the commuter belt around Dublin, with real estate prices decreasing 16.8% in the counties of Wicklow, Kildare, Meath and Louth in 2008 for example. The reasons behind the higher price falls in property in these areas has been in part due to increased supply in the Dublin urban area, higher interest rates on mortgages, and infrastructure issues in rural communities surrounding Dublin.
The year 2008 also saw a decrease in the price of Irish property for first time buyers with a drop of 14% over the year. This comes on the back of a drop of 6.5% during 2007 and brings the average price of a house for a first time buyer in Ireland down to £196,000 as at December 2008.
New housing developments registered with local councils are also down in Ireland. Between 2004 and 2006 there were around 77,000 new commencements registered with local authorities. This dropped to 49,000 in 2007 and tumbled to just 23,000 in 2008. A number of these projects were simply abandoned as money ran out or developers went bust. The forecast for 2009 is for around 25,000 completions, but with the shaky state of the Irish economy, it is anyone’s guess really!
So what is the prognosis for real estate in Ireland in 2009 and is it still a market to consider? Most people in the know are predicting property price falls of a further 10% for 2009, which will mean prices have fallen around 26% since the heady days of 2006. Whilst the current economic climate in Ireland will frighten off many buyers, the shrewdest investors never follow the crowd. Property in Ireland may well represent a good investment in 2009 if you haggle hard and buy in where there are good long-term prospects for growth and demand.
