Irish property prices in first annual rise since crash

Residential property prices in Ireland have risen annually for the first time since a catastrophic crash five years ago sent the country spiraling towards financial disaster, official data showed Tuesday. "In the year to June, residential property prices at a national level, increased by 1.2 percent. This is the first annual increase since January 2008," the Central Statistics Office said in a statement. "It compares with an annual rate of decline of 1.1 percent in May and a decline of 14.4 percent recorded in the twelve months to June 2012," the CSO added. While Tuesday's figures are a tentative indication of recovery, property prices in the bailed-out eurozone nation remain 50 percent lower compared with their peak in 2007, leaving thousands of owners in negative equity, or with mortgages larger than their property's worth. Ireland's banks lent aggressively to professional and amateur property developers during a decade of easy credit and economic growth and were left perilously exposed when the market crashed. The Irish government pumped billions of euros into the banking sector soon after to keep it afloat but the country was eventually forced to turn to the European Union and the International Monetary Fund for a bailout in late 2010. Dublin also established the so-called toxic bank, the National Asset Management Agency, in 2009 to remove high-risk loans from the Irish banking sector. It has since acquired loans with a nominal value of 74 billion euros ($97.56 billion) from a number of participating Irish banks in an attempt to repair their balance sheets. Official data last month meanwhile showed that Ireland had fallen back into recession for the first time since 2009, with the nation rocked by sliding exports and consumer spending. Gross domestic product (GDP) shrank by 1.0 percent in the third quarter of 2012 and by 0.2 percent in the fourth quarter, according to CSO data. This contraction over the second half of 2012 meets the technical definition of a recession -- two quarters running of falling output.