New Irish index shows extent of property crash

(DUBLIN) - The collapse of an Irish property price bubble that has blitzed the country's banks has seen values plunge by up to 52 percent since a 2007 peak, a new government index showed on Friday.

The first results from a new Central Statistics Office (CSO) index show that, countrywide, prices of all residential property are down almost 40 percent on 2007 -- and they are still falling.

The apartment market in Dublin has been worst hit by the property crash with a 52 percent drop in prices from February 2007.

House prices in Dublin are down about 45 percent and the fall throughout the rest of the country has been lower at just over 35 percent.

Adding to the pain of Irish homeowners, the index -- which is based on mortgage data from the country's eight main lenders -- shows the price plunge is continuing.

"The monthly rate of decline increased to 1.7 percent in both February and March of this year; the largest monthly decreases since July 2009," the CSO said.

It said Dublin home prices fell by 1.8 percent in March and were 13 percent lower than a year ago.

After years of reckless lending the Irish banking sector was hammered by the property crash.

The government set up a so-called bad bank, the National Assets Management Agency (NAMA), to buy soured property loans from the debt-ridden financial institutions in an effort to cleanse the sector.

This month it reported it had so far bought loans with a nominal valuation of 72.3 billion euros ($103.2 billion) at a discount of 58 percent. It may acquire a further 3.5 billion euros of loans in the coming months.

The property bust has left 2,800 "ghost" housing estates scattered around the country containing 33,000 empty homes.

An environment ministry survey said the number of vacant homes either completed or nearly completed is roughly equal to 18 months of the output of the stricken country's construction output of new homes in 2009.

Last November, Ireland had to seek an 85-billion-euro rescue package from the EU and the IMF as massive debt and deficit problems left the country on the verge of collapse.