The latest figures from the CSO show that property prices are continuing to fall in the Irish economy. Figure 1 shows how they have declined from their peak value in 2007 to their current low in June 2011. The continual fall in house prices will continue to have negative implications for mortgage holders, who will see the value of their property continue to fall while they go further into negative equity.
While the price of housing is continuing to fall there has been a slight slow down in the rate of this fall as displayed in Figure 2. We can see that recently the rate of decline has been in the region of -1 to -2 percent. This might have given some hope that the worst of the decrease was over, however, in June the decline broke past the 2% mark to reach a value of -2.1%. Overall the decline from June 2010 to June 2011 in house prices has been -12.9%.
Justin Doran is a Lecturer in Economics, in the Department of Economics, University College Cork, Ireland.