House prices will not improve in 2011

While the rest of the country’s house prices stabilised, Donegal was one of the last places where asking prices dropped according to top economist Ronan Lyons (right) from Daft.ie.

According to a report from daft.ie the average asking price in Donegal in the final quarter of 2010 was €172,000, a fall of €97,000 from the peak.

Mr. Lyons said Donegal only got caught up into the property late and believes this, along with house prices in Northern Ireland, to be the reason why house prices remained so high.

He revealed to the ‘Journal’ the average house price has dropped over 36% in the past three and a half years.

“The peak for Donegal was in 2007 when the average house was worth €270,000, where as now they just worth about €170,000. That is a huge drop in a short period of time.”

Mr Lyons confirmed there was a sharp fall in the final three months of the year.

“We didn’t think the fall would be a big as it was as throughout 2009 prices were on course with about a 10-15% drop, and in 2010 there was a fall of about 18% in comparison to the 2007 figures but towards the end of the year, prices dropped even more to 36%.

“It is definitely one of the worst in the whole country.”

Another report carried out by property myhome.ie the found the average price of a four bed semi detached house in Donegal was €185,588, down 9.04% from the previous quarter, and down 10.4% in the last 12 months.

Meanwhile, they found the asking price for a three bed semi in the county was €165,000 down 3.8% from the last quarter, and down 7.6% from the previous 12 months.

Mr Lyons believes it will continue to get worse for people sealing their homes in the coming years:

“Conditions are really buy for people wanting to see their houses, they are good for buyers if they get the money to buy, but with credit circumstances continuing to get worse it will be difficult for people.”

The financial expert believes people in Donegal can expect more of the same for 2011:

“I can’t see things improving in the near the future. At the minute there is so many houses laying vacant and we will have to wait until the market stabilises, we clear through the backlog of empty houses and the credit starts flowing again, and that is certainly not going to happen overnight. I think 2011 will be another year for adjustment.”