The results of a new house price survey conducted by Daft.ie, held bad news for sellers in Galway city, with asking prices dropping by almost 11 per cent during 2007.

The average house price in Galway is now €328,726, under the national average of €353,000. Asking prices in Connacht, excluding Galway city, fell by 2.2 per cent on average, while the figure for Co. Galway was 2.6 per cent. The average price for Connacht is now €269,347.

Galway is now the most expensive place in Connacht to buy a four-bed property, which costs approximately €382,000 in the city.

The survey showed that the average house price in Galway is now €328,726, under the national average of €353,000. Prices in Dublin continue to push up this average, at an estimated €339,226, while Cork is next at €378,562. Limerick and Waterford are both significantly cheaper, at €259,243 and €278,353 respectively.

Commenting on the report, Ronan Lyons, economist at Daft.ie, said: "Daft.ie's figures show that asking prices were static in 2007, while the ESRI/permanent tsb index shows that closing prices fell steadily throughout the year. These two trends together mean that sellers can no longer expect to achieve five to ten per cent more than their asking price, as they might have up to late 2006. Now at the start of 2008 sellers are typically expecting five to ten per cent less than their asking price. Anecdotal evidence had suggested that many sellers were resisting offers below their asking prices for most of 2007. The recent fall in stock, however, may be the first sign that vendor expectations are adapting to the new situation."

In her commentary on the latest Daft Report, Professor Frances Ruane, Director of the ESRI, provided an outlook for 2008, citing grounds for optimism but also reasons why consumer confidence will remain fragile. "Firstly, to the extent that the recent changes in stamp duty are seen as reducing uncertainty, they should lead to increased confidence. Secondly, while economic growth rates will be lower than in previous years, they are not low relative to the rest of the EU, and taken with the growth in the population seeking housing should have a positive effect on demand.

"On the other side, threats of increases in the ECB rate have not gone away, and this will lead buyers to be cautious. Furthermore, buyers may be affected by banks tightening their credit. The behaviour of builders and developers in releasing stock for sale will also be important in certain parts of the market. While many factors influencing the housing market remain positive, it is the level of confidence consumers feel over the course of the year that will be crucial in determining the final outcome."

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