Data just released by the Central Statistics Office (CSO) show that Irish residential property prices fell 0.6% m/m in October, snapping a three month run of monthly gains. The annual rate of decline in Irish residential property prices improved to -8.1% in October from September’s -9.6% y/y rate. The annual rate of decline is now at its lowest level since September 2008.
Within the data we see divergences across the country. While national prices fell 0.6% m/m in October, this was far from uniform. Dublin residential prices slipped 0.2% m/m, reversing some of the previous month’s 2.4% m/m gain, while outside of the capital prices declined 0.9% m/m.
In all, we would be loath to read too much into just one index reading given the still muted level of transactions activity involving mortgages (cash transactions, estimated to have accounted for 46% of house purchases in H1 2012, are excluded from the CSO’s index). In terms of the outlook, our view remains that, after four consecutive years of double-digit price declines, the worst is over for the Irish housing market. In saying that, as with the latest data, we see divergences across the country, with the prospects for the Dublin market looking brighter than for other areas, where oversupply remains a concern. By way of illustration, over the past four years the stock of units for sale on Daft.ie, Ireland’s largest property website, has declined by 45% in Dublin, but by only 18% in the rest of the country.