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Report shows housing loans fall by 22%, fewer houses being built | Print |  Email
Wednesday, 08 August 2007

The latest official figures show a sharp decline in the number of loans approved for house purchases in the first three months of 2007. The latest housing statistics bulletin from the Department of Environment showed the 24,500 loans approved represented a drop of nearly 22% compared with the same period last year, with the value of these loans down 16.4% at €6.4 billion.

The bulletin shows that the average price of a new house was €320,969, up 9% on a year earlier while the average second-hand house price was also up 9% at €379,874. However, the average price of new and second-hand houses and apartments in Dublin fell marginally in the first quarter of this year when compared with the end of 2006.

Meanwhile, Goodbody Stockbrokers has lowered its forecast for economic growth next year because of a bigger than expected slump in house building activity. The report showed 38,978 new homes were finished and 31,600 started in the first half of the year. The completion figure represents a sharp drop from the 43,899 in the same period last year, when a record 93,000 homes were built.

In a new report, the stockbroker has cut its estimate of the number of new homes to be built this year to 75,000, falling to 60,000 in 2008 and forecasts house prices will fall by 4% this year. The stockbroker has also published a survey of mortgage brokers, estate agents and solicitors on the property market which finds the mortgage market has remained "depressed" and that the ending of speculation about stamp duty has had little effect. It also sees a slowdown in construction employment, with a fall of up to 10% in the next two years.

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