In the spring of 2011, for a very brief period it seemed like the picture for the Irish housing market may finally be improving; that if prices weren't going to stop falling, at least their rate of decline would start to slow, and failing that at least stop accelerating. But as the Eurozone crisis really started to kick-in to overdrive all bets for Ireland were off again.
We now find out that in fact, Irish house prices fell by 16.7% in 2011 and that the rate of decline accelerated in November and again in December, due to the worsening Eurozone debt crisis.
The data, which comes from the Central Statistics Office shows that Dublin houses have fallen in value by 54% since the peak in 2007, while apartments and flats have lost 58% of their value in the Republic of Ireland capital. Outside Dublin house prices have fallen by 43% since the peak, and the overall decline for Ireland including Dublin is 47%.
In October house prices across the nation fell by a not-too-bad 0.5%, in November the decline accelerated rapidly to 1.5% month-on-month and in December it accelerated again to 1.7%.
Ireland has been one of the hardest hit economies and property markets in the world by this crisis, but that is only because it tripped the lightest fantastic during the boom. In the 10 years to 2007 Irish house prices grew by 200%. That is not only the largest growth recorded by any European nation during the boom years, but, for anyone that doesn't see it that is also an average growth rate of 20% per year.
Of course we all know now that this growth was inflating a bubble, which, when popping would trigger a banking crisis large enough to cripple Ireland financially and force it to ask for emergency financial aid (read bail-out) in November 2010. On the slightly brighter side, the Irish economy did return to growth last year, after a 3 year recession, due to surging exports.
- Wednesday 25 January 2012