* Peak-to-trough fall stabilising at 50 percent
* Data will ease fears for banks, could boost consumers
By Conor Humphries
DUBLIN, Oct 24 Irish house prices grew at their
fastest monthly rate in five years in September, adding to signs
that the property market is stabilising after peak-to-trough
falls of 50 percent.
Economists say a stabilisation of the market is vital to
allow crisis-hit Irish banks and households to recover and
generate the economic growth needed to begin to pay off the
debts that forced the country to seek an international bailout.
Property prices rose 0.9 percent from August, the central
statistics office said on Wednesday, The annualised rate of
price declines narrowed to 9.6 percent, having stood as high as
16.4 percent in April.
Overall peak-to-trough falls in house prices have remained
stable at 50 percent since May, above a base-case assumption of
a 55 percent fall in stress tests of the Irish banking sector
last year and an adverse assumed fall of 62 percent.
The huge property bubble that burst in 2008 was a key factor
in forcing the government to plough 64 billion euros into the
country's banks. It also left tens of thousands of construction
workers unemployed and a generation of mortgage holders deep in
negative equity, dragging down consumer demand.
The early signs of the market's recovery should help boost
consumer confidence in the months ahead, but the sector is now
too small to provide a direct boost to gross domestic product,
said Eoin Fahy, an economist at Kleinwort Benson Investors in
"It can only be seen as encouraging," he said. "It's a straw
in the wind, something pointing to better times ahead."
While the risk of further significant falls in residential
property prices are quite small, there is a reasonable chance
the falls to date may be revised, he said.
Prices in Dublin, which have fallen 56 percent since their
2007 peak, climbed 2.4 percent in September on a monthly basis.
Economists polled by Reuters last month forecast that
national property would fall by 13 percent in total this year
and 3 percent next year before bouncing back in 2014.
Prices have been boosted in recent months ahead of the
expiration of mortgage interest tax relief at the end of the