The latest September 2011 quarterly review of the Irish property market by the Bank of Ireland has reported that the consensus view among Irish analysts is that the Irish housing market will bottom in the second half of 2012. Meanwhile, the most recent OECD work on the housing cycle predicts a trough in Irish prices this year or next.

However, property prices fell nationally by -4.0% in the three months to July, bringing the decline from the peak to -42.5%. The consumer price index was unchanged over that period so the decline in real property prices was also over 42%.

House prices in Dublin are showing signs of divergence from the national trend though, rising modestly in both May and July, although a sharp fall in June still left the 3-month change at -1.9%, so it is too early to say that prices in the capital have bottomed.

The flow of mortgage lending for house purchase did pick up marginally in the second quarter, but is still very weak relative to the previous year, at €500m, which is just half the figure for the second quarter to 2010.