Belfast Telegraph

House prices continue to decline

House prices continued to fall during May with the drop over the last year unchanged at 12.2%.

The official record of Ireland's crash-hit property market has prices down 41% since the peak in 2007.

The Central Statistics Office said values fell by 1.2% in May but Dublin threw up a surprise with the capital recording its first rise - 0.3% - in prices since April 2008.

But experts warned to treat the minor increase with caution and said it was more likely a blip and short-term volatility than more underlying change in the market.

Rachel Doyle, director of the Professional Insurance Brokers Association, claimed the banking system was still choking the housing market after going from one lending extreme to the other.

"There is an underlying demand for mortgages which is not being met. Lenders are still rejecting up to 80% of mortgage applications," she claimed.

"And she said the main reasons mortgage applications are refused by lenders are attributed to job security - either the applicant has not been in current employment for sufficient time or their employment is a fixed contract rather than permanent (36%) - and applicants not qualifying for the amount required (21%).

"The squeeze on bank lending is severely hampering first-time buyers and those wishing to trade-up or re-locate."

She added: "While no one is suggesting that banks should return to imprudent lending, they have gone to the opposite extreme to where they were."

"Unless it is sorted out in the foreseeable future the housing market and indeed the entire economy will be at further risk."

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