House prices in Galway are continuing to fall, despite suggestions that the market may be stabilising elsewhere in the country.
The latest Daft.ie House Price Report, which was published last week, showed that house prices in the city have fallen by ten per cent in the last year. However, there was some good news as figures also indicated that the freefall of the property market in the West is slowing considerably.
While prices in late 2012 were ten per cent lower than a year previously, this was less than half of the 23 per cent drop experienced in 2011. The average house price in the city now stands at €167,000, 57 per cent below peak levels.
This reflected the case in the county also, where house prices are down 57 per cent on the Celtic Tiger boom and the average now stands at €138,000. The survey found that prices in late 2012 were 19 per cent lower than a year previously, compared to a fall of 14 per cent seen in the year to late 2011.
The price drop is Galway is similar to that experienced in Limerick (-9.3 per cent) and Cork (-8.7 per cent), but Dublin City Centre is bucking the trend with a slight growth of 0.1 per cent.
But, while the annual picture may be bleak, a Q4 2012 property snapshot from MyHome.ie was slightly more reassuring for homeowners, highlighting a rise of 2.7 per cent in median prices for four-bedroom semi-detached houses in Galway in the last three months of the year.
According to the report, the average price for a house of this type now stands at €190,000 and Galway is one of the few counties to show an increase in the last quarter. The median price for three-bedroom semis in Galway was unchanged in the final quarter at €165,000, a fall of almost 45 per cent from the peak of the housing market.
Local auctioneer Colm Donnellan of O’Donnellan & Joyce said there was a definite rise in price for three and four bedroom semi-detached homes in ‘established areas’ such as Knocknacarra and Rahoon over the last quarter of 2012 and said that demand is beginning to outstrip supply in the city centre and environs.
“There is a market out there and I think prices have hit the bottom in established areas, while there is still a certain drop-off to come in areas outside the city,” he said.
“There has been no houses built in the city in the last five years but the demand is still there. We sold over 100 houses last year in the auction room and, for each of those properties, there were about five people bidding on them, so there are people out there and there is a very strong demand but finance is going to be the key factor that governs the market over the coming year.”
Mr Donnellan revealed that the company had been approached by two banks in the latter half of 2012, who wanted to highlight that they were ‘open for business’, but added that a much higher level of lending is needed.
“There are loads of buyers, the biggest problem at the moment is access to finance and we are hopeful that this will improve over the year.
“If you see the banks coming back into play, then you will definitely see a dramatic change in the market. Last year, there was a huge upsurge in sales. The prices may not reflect that but any auctioneer will tell you it was a substantially better year.”