Positive Signs for Irish Property Market
The number of residential property transactions in Ireland increased by 14.4 percent during the first quarter of 2013, evidence of a recovery in a market that collapsed in spectacular fashion, post-2008.
There were 4,450 transactions during the quarter compared with 3,900 the previous year, representing the sixth consecutive quarterly year-over-year increase in volumes, according to the Irish Banking Federation's latest Housing Market Monitor.
Ireland's housing market seems to be recovering from the country's worst crisis, after prices fell almost 50 percent from the peak in 2007. House prices are showing signs of stabilizing in Dublin and other areas.
However, the Irish banks that survived the crisis are still dealing with many bad home loans, reports the Wall Street Journal
Although there are more transactions, mortgage approvals fell by 4 percent during the quarter compared to last year, for the first time since data was available in 2011, according to the Irish Times.
"The most obvious reason for the divergent trends between mortgages and transactions is an increased incidence of cash purchases," Goodbody economist Dermot O'Leary told the Times.
"While one interpretation of this may be that credit is not available in the banking system, another is that buyers are using cash to invest in the Irish property market given the superior returns relative to ever-shrinking deposit rates in the Irish banks," Mr. O'Leary added.
It may be some time before Ireland's housing market makes a full recovery as prices continue to fall, although at a slower pace.
The Land and Property Services (LPS) and the Northern Ireland Statistics and Research Agency (NISRA) recently reported prices dropped six percent in the year up to March, making the average price in northern Ireland £109,000, according to the Irish News. But that was considered good news, with prices sliding at a slower pace than the 13 percent drop in the previous year.