Clare house prices drop by 17.4% in 2011

CLARE recorded the second highest drop in asking prices for houses in Munster over the past year, according to detailed analysis conducted by a national property website.

The Daft.ie asking prices index has revealed house prices in Clare dropped by a massive 17.4% to an average of €160,876 at the end of 2011, which represented a 47.5% slump from the peak a few years ago.
In fact, Waterford City was the only region to register a higher drop of 24.5% at the end of 2011 compared to 17.2% in County Cork, 16.9% in Limerick City, 16.4% in Cork City, 16.1% in Tipperary, 11.4% in County Limerick, 10.8% in County Waterford and 8.1% in Kerry.
Just under 33% of properties listed in Munster find a buyer within three months but only a further one in six find a buyer within a year. 
Meanwhile, the average price of a three-bed semi-detached house in Clare rose by 0.63% in the last quarter of 2011 to €160,000.
In its latest report, property website MyHome.ie noted Clare was the only county in Munster to record a rise for this house type but the average price of a four-bed semi remained unchanged at €175,000.
Adopting different approaches to the property market situation, the websites provide an interesting perspective on past performance and indicators for the year ahead.
According to MyHome.ie, the median price for a four-bedroom semi-detached house didn’t change in the last quarter of 2011 and fell by 13.15% in 2011. This compared to a drop of 7.83% in the last quarter of 2011 in Kerry and an annual drop of 19.68%.
Brian McMahon of Brian McMahon and Daughters Auctioneers, Ennis, expects house prices in Ennis to bottom out by the middle or the third quarter this year.
Stating house sales are now back to similar levels as when he started selling properties about 30 years ago, Mr McMahon doesn’t expect to see a further dramatic drop in prices the year.
Looking back on 2011, he recalled the autumn was relatively busy compared to recent years and felt Clare sellers are becoming much more realistic in terms of asking prices, which helped to explain why the drop was so high in the county this year.
Stating there is great value to be obtained in residential property, he noted in a lot of cases the asking price of between €110,000 and €120,000 of a three-bedroom semi-detached house in the Ennis area is now lower than the reinstatement value of €130,000 for insurance purposes.
While he estimated houses prices in Ennis have dropped by about 50% since the peak, the fall for good residential properties in the rural countryside is as low as 30% in some cases.
However, he acknowledged the drop in asking prices was as high as 70% as people were worried about the resale value of this type of residential property. He pointed out it is cheaper for someone to purchase a two-bedroom apartment in Ennis for about €70,000 than pay rent of between €450 and €470 a month, once they secure a monthly mortgage repayment of between €350 and €400.
Expressing concern about the levy of PRSI on rental income, he urged the Government to ensure all the banks pass on any further reductions in the ECB rate to make homes even more affordable to first-time buyers. He said it is vital banks start approving mortgages to first-time buyers who can afford to pay them and asked that the Government ringfence loans specifically for first-time buyers.