Irish property prices slump

Country:  Ireland

18 August 2008

Average property prices in Ireland fell 0.6% in June, making it the worst half-year performance in over a decade.

An index published by Dublin-based Irish Life & Permanent reveals that the median price of an Irish home depreciated 5% in H1 2008, while further price falls of 10% are anticipated, following a 7.3% fall decline in 2007.

The Irish property market has struggled over the past year or so, following a decade of robust growth. This has been caused largely by tighter finance restrictions, which includes higher borrowing rates.

"The solution to this is a combination of an economy getting back on track and interbank lending opening up again," Niall O'Grady, business strategy manager at Irish Life, said at a press conference. "We can't say when the international credit crisis will end."

Prices for new homes have slumped 10.1% year-on-year, while prices for existing properties have fallen 8.8%, according to the index. The average price paid for a house in June was €273,392, a drop of €30,000, compared to the same time last year.