Thousands of Irish homes are for sale at less than 70% of their peak market value as Royal Bank of Scotland tries to clear their books of bad debts.
RBS has a huge portfolio of homes for sale for £97 million – around 30% down on their value of around £140 million at the peak of the housing market in 2007.
The properties include 640 apartments and a hotel, according to brokers handling the sale. The portfolio generates around £4.3 million a year in rent.
Property consultants Savills are selling the portfolio, and other Irish properties offered at discount prices by receivers handling the administrations of development companies.
House prices in the Republic of ireland collapsed as the economy crashed when property bubble burst.
Prices slump by 50%
In five years, the number of households living in rented accommodation has soared by 50%, according to official figures.
Private equity firms are reportedly buying up to 3,000 flats and houses at a time as rentals, according to the National Asset Management Agency.
The RBS properties are for sale through troubled subsidiary Ulster Bank. The bank’s exposure to falling property prices fell to £191 million in the second quarter, from £982 million a year earlier after RBS made a “substantial” provision in the 2011 accounts.
Ireland’s housing market has slumped for years, with current prices down up to 50% on those of 2007.
However, official statistics show prices may have hit rock bottom with a rise of just 0.2% from july to August – but still a 13.6% decline over the year.
World’s worst property market
Dublin house prices dropped 0.2% in the month and were 16.7%, while apartment prices decreased 19.6% lower, compared with 12 months earlier.
A recent report from the International Monetary Fund rated Ireland’s housing market as the worst in the developed world – just lagging Greece.
The IMF has also called on the Irish government to tighten austerity measures by levying a 0,25% property tax on the value of each home from next year. The tax is expected to cost between €250 and €400 per property.
The IMF had advised a 0.5% property tax to raise €1 billion a year, but this was rejected by the Irish government.
Economists polled by Reuters expect property prices to fall by 12% this year before stabilising in 2013.