subject: Signs of Life in the Irish Property Market? [print this page] Signs of Life in the Irish Property Market?
There appears to be mixed signals from international ratings agency Standard and Poors.
On the one hand, they have recently stated that the Irish property market is now undervalued but they did not rule out further declines in property prices.
During the summer of 2010, a couple of houses sold above their guide price. In Greystones, County Wicklow, a four-bedroom bungalow sold for 910,000, 40 percent above its guide minimum of 650,000. In Blackrock, County Dublin, a four bedroom semi-detached on a third of an acre site sold for 975,000, 8.3 percent above its guide price of 900,000.
In the recent Standard and Poors report they said that Ireland's property market could be undervalued with the steady fall in house prices caused by oversupply in the market. However, they did not rule out a continued decline in prices. In the report Standard and Poors said that the ongoing market correction "seems overdone" and estimated prices were undervalued by about 12%.
The agency said Irish house prices, which recorded an 18.5% decline in 2009, were showing a marked difference to other European markets, which displayed signs of pulling out of the recent price correction.
"Fundamentals driving the Irish market have nevertheless improved dramatically. The market appears undervalued today compared with long-term historical averages", the report said.
It remains to be seen how accurate Standard and Poors are with their assessment of the Irish property market. It may be that any objective survey (ie rental returns, replacement costs etc) of the current Irish property stock will find that most properties are still overvalued.
