PROPERTY prices have hit rock bottom -- but could stay there for years, according to a new report.

The average price of houses and apartments is now as low as €100,000, the report claims.

This is just a third of the average price properties sold for during the boom.

Prices have fallen so far in the last five years that it now takes less than three times the income of a single person to buy a property.

But now that they have reached a floor, prices may stay at their current level for ages, the report from Goodbody Stockbrokers says.

The report makes it clear that this is due to the current mortgage lending famine.

The study by economist Dermot O'Leary found prices have now fallen 68pc from the peak in 2007.

These are based on the prices reached on the Allsop Space distressed property auctions which have drawn a lot of interest.

Mr O'Leary said this fall was far greater than the 48pc recorded by the official Central Statistics Office (CSO) property price index.

His report contends that the prices achieved in the Allsop auctions more accurately reflected what was really happening in the market.

This is because the CSO figures do not take account of cash purchases, which account for up to a third of sales.

The lack of up-to-date data was contributing to the length of the house-price crash, he said.

"Allied to tight credit conditions, housing oversupply and a weak domestic demand environment, the lack of transparency on sales prices in the Irish residential property market has contributed to the prolonged nature of the Irish housing market crash," he said.

The report said that mortgage lending last year was back to levels last seen in 1971, adding that a key ingredient for any recovery in the Irish property market was credit availability .

Mr O'Leary calculated that the price of houses and apartments was €100,000, based on a 68pc price fall.

The average property price peaked at €314,000 in January 2007.

The new average price means that it now requires 2.8 times the salary of a single person to buy a home. That calculation is based on an average wage of €36,000.

This compares with a long-term average of three-and-a-half times to four times income in the UK and a peak of 8.6 times income in Ireland.

Mr O'Leary said prices had now hit the bottom.

"While it would be our contention that prices are undershooting due to lack of access to credit and a weak domestic economy, this analysis suggests that residential property, at 60pc-plus from peak, is now transacting for prices very close to, or at, fair value," he said.

However, he said that the mortgage market was set to "remain moribund for a significant further period of time".

Goodbody Stockbrokers is owned by Kerry-based financial services group Fexco, and not connected to any mortgage lender. Mr O'Leary's findings chime with a study of 325 cities in English-speaking countries that found that property here had now reached affordable levels for thousands on average salaries.

The prestigious Demo-graphia International Housing Affordability Survey found house prices were 3.3 times average salaries in the winter of last year -- just a little above what international researchers deem affordable.

Mr O'Leary said a lack of mortgage lending was hurting the market.

Just AIB and Bank of Ireland are lending to first-time buyers.

AIB will lend to those who have a deposit of at least 8pc of the property's value, but Bank of Ireland requires a deposit of at least 10pc.

Last year 14,000 mortgages were advanced, but this falls to 11,000 once top-ups and re-mortgaging are excluded. A normal level of lending would mean 40,000 mortgages being advanced.

Irish Independent