As we now have the usual quarterly troika of Irish residential property price surveys from DAFT.ie, Myhome.ie and Sherry FitzGerald, this entry is a roundup to see what the surveys are telling us. The Myhome.ie survey is not available from its website yet (UPDATE: 4th July, 2011. Now available here), the Irish Times which owns the website reports on some of the results here, so apologies Myhome.ie’s cells in this spreadsheet are underpopulated – blame meeja management, but I don’t think you’re missing much and certainly not enough to wait for the full Myhome.ie report to be published. Here’s the overview.
(1) At regional level, prices dropped 3-6% in quarter two of 2011 and 12-17% in the last year.
(2) At regional level, prices are 40-47% off peak according to Myhome/DAFT and 55-60% off peak according to Sherry FitzGerald.
(3) At regioanl level, price drops accelerated during the quarter. Why? My guess is the Allsop/Space auction on 15th April 2011 where openly tendered prices appeared to be some 60% off peak.
(4) DAFT.ie provide statistics at county, city level. The largest decline in the quarter was in Offaly (11.7%), in the past year Longford (21.9%) and from peak Dublin City Centre (54.6%). The smallest decline in the quarter was Kerry (1.6%), in the past year Leitrim (11.2%) and from peak Limerick City (34.1%). These figures tell me we have a dysfunctional property market as far as asking prices go.
In terms of how the different sources compile their statistics this is what each has to say.
(1) DAFT.ie : Its index is based on properties advertised on Daft.ie for a given period. The national average is built up from Census weights per county, in effect ensuring the average reflects where people live, not any variations from that that may exist in Daft’s market share. The regressions used are hedonic price regressions, accounting for all available and measurable attributes of properties and only coefficients with a very high degree of statistical significance (p < 0.001) are used. The average monthly sample size for sales during 2009 was over 10,000. Indices are based on standard methods, holding the mix of characteristics constant, with the annual average of 2007 used as the base. A working paper on the methodologies employed in both rental and sales markets will be published on the Daft.ie website soon. Stock and flow statistics are calculated using consistent series for the period covered.
(2) Myhome.ie : Its index is based on actual asking prices of properties advertised on MyHome.ie with comparisons by quarter over the last six years. This represents the majority of properties for sale inIreland from leading estate agents nationwide. The series in this report have been produced using a combination of statistical techniques. Our data is collected from quarterly snapshots of active, available properties on MyHome.ie. Our main National andDublin indices have been constructed with a widely-used regression technique which adjusts for change in the mixture of properties for sale in each quarter. Since the supply of property in each quarter has a different combination of types, sizes and locations, the real trends in property prices are easily obscured. Our method is designed to reflect price change independent of this variation in mix.
(3) Sherry FitzGerald : Its index is based on the analysis of a basket of properties in its locations nationwide. Commencing in 1996 in theDublin market, it was extended nationwide in 1999. Each basket of properties was chosen based on a weighted profile of properties in each location. The basket extends to over 1,500 properties, which are re-valued on a monthly basis forDublin properties and a quarterly basis for nationwide properties with results produced quarterly. The basket is held constant and re-valued based on market evidence. Sherry FitzGerald through its franchise network is represented in every major city, town and county inIreland.
So two of the above are asking price indices and the Sherry FitzGerald is a valuation assessment index (akin to how SCS/IPD and JLL compile the commercial property indices as far as I can see)
Note Ireland has two actual sale price series, one from the Department of the Environment Housing and Local Government which is an atrociously crude average of mortgage transactions and is issued six months after the event; the other is new and is from the CSO and is issued monthly and is an hedonic index but only based on mortgages at eight Irish lending institutions. NAMA has recently said that prices were down an average of 50% from peak in November 2009, 16 months ago. There is no word on the immediate intentions of the new government on the House Price Database – the legislation is drafted in the Property Services (Regulation) Bill amendment and Fine Gael indicated it would pick this legislation up and progress it. Dail committees were only established in June 2011 but there has not been any progress at all.
In terms of outlook, who knows? These are the latest predictions/projects captured on here which I believe to be a comprehensive reflection of reported predictions and projections.
One other comment about the daft.ie methodology that I think is pertinent: the national average built up from Census weights per county, in effect ensuring the average reflects where people live, not any variations from that that may exist in Daft’s market share.
I think this is what explains the gap between the two averages (€200,000 for Daft, €250,000 for myhome).
@Ronan, many thanks, I will update the post above to include that detail. Also I see from the Irish Examiner today some comments from you in respect of the latest survey where you say
“With successful auctions of distressed properties at 60% or more below peak levels, the sharp fall may actually reflect increased realism on the part of sellers,”
Read more: http://www.irishexaminer.com/breakingnews/ireland/house-prices-continue-to-fall-511407.html#ixzz1R8EHKToP
Which chimes with the musing on the blog here. And I had not seen your quotation before submitting the above post, honest!
http://www.irishexaminer.com/breakingnews/ireland/house-prices-continue-to-fall-511407.html
is there a reason for David Mc W to be in there twice, with different estimates.? genuine queery, absolutely not being picky
@martindgl, there are forecasts and projections from the same people and organisations at different times eg David McWilliams and Standard and Poor’s.
If Morgan Kellys prediction of an 80% drop from peak(2007) actually takes place and I have no reason to believe it won’t then a National Average Price for a 3 bed semi would be €311-80% = €62,000 even lower than the 2 and a half times the National Average Industrial Wage which I have been predicting for the last 2 years also.
Whilst I am sure Morgan Kelly can speak for himself were he sufficiently interested, his actual “prediction” was price falls could be as high as 80% in real terms in some areas. There are a lot of qualifiers there: “could be”,”as high as”, “in real terms”, “in some areas”
@Dee, if you take the largest decline above of 60% recorded by Sherry FitzGerald in Dublin, an 80% drop would indcate another 33% drop from pessent levels. Truth be told, I don’t hear agents or commentators suggesting we’re at the bottom yet so an 80% drop? Unless credit conditions and prospects for the overall economy improve, we may indeed have further drops.
NWL, I am not disputing that a drop of 80% is not possible.
Rather, I am observing that MK did not predict that prices would fall by 80% peak to trough. He said they could fall by as much as 80% in real terms in some areas.
@Observer, Aah, I understand now. The list shown above is most accurately termed “forecasts and projections”, for example David McWilliams said that IF property prices were to be reflective of present rents THEN the average drop WOULD be such-and-such. That’s what I would call a projection. Others issue straight-forward forecasts, S&P for example. The Central Bank unconvincingly stated its projections upon which the recent bank stress tests were based, were not forecasts but appropriate “hypothetical scenarios”. Here is the spreadsheet with the projections and forecasts and the source for each is in the comment field.
https://spreadsheets.google.com/spreadsheet/ccc?key=0AlV6jFjykyK6dGQ3M05YWGpiWWlfZkhJOHJjZTZHdlE&hl=en_US
The source for the Morgan Kelly entry on the spreadsheet is the following:
“In a presentation that drew several collective intakes of breath, Mr Kelly predicted that house prices would fall by 80 per cent from peak to trough in real terms.”
http://www.irishtimes.com/newspaper/finance/2009/0113/1231738220759.html
I apologise – the slides from the above referenced conference are quite clear and don’t include all the qualifiers I listed above
http://www.irisheconomy.ie/Crisis/KellyCrisis.pdf
I googled in vain for my version above, I know I got t from somewher
[...] This hopefully gives some meat to the bones of the predictions accredited to me in NAMA Wine Lake’s convenient table of property market calls. AKPC_IDS += "1791,";Bookmark Tags: daft report, house price income ratio, house price rent ratio, [...]
Those interested in why I’ve predicted what I have, or what metrics we might use to forecast where house prices will “land”, might be interested in a blog post I’ve published today (as per the trackback above):
http://www.ronanlyons.com/2011/07/05/are-we-nearly-there-yet-finding-the-new-floor-for-property-prices/
One other query, if I can put my Daft hat on for a moment: given Daft has the best regional information, why do we only get one column in the table up the top?! All the quarterly, year on year and from peak falls, by region, are in each Daft report… Just sayin’! :)
@Ronan, received loud and clear and the table has been (vastly) expanded above.
The county and city figures are interesting but it seems that there is dysfunction still in the market. Why would Offaly have recorded the largest quarterly fall of nearly 12% and Leitrim the lowest annual fall of 11% and the lowest fall from peak is Limerick City (34%).
Can I ask you a question about the DAFT national index. The June index is 53.8, the March 2011 index was 57.3. Would it be correct to show the quarterly decline as 6.1% (53.8/57.3-1)? The reason I ask is that the report suggests 5% but that might be rounding?
BTW I recommend Ronan’s article linked above (and below) which explores current prices in the context of the famed “bottom”
http://www.ronanlyons.com/2011/07/05/are-we-nearly-there-yet-finding-the-new-floor-for-property-prices/
Sorry for the delay in replying – was off on hols! The headline quarter-on-quarter figures in the report and press release are an average for Q1 compared to an average of Q2, rather than the March – June figures compared. That should hopefully give you 5.1%, rather than 6.1%…
This is for consistency with the county-level figures which – to ensure minimum qualms about sample sizes – are only ever really looked at as quarterly figures (rather than monthly).
Thanks for expanding the table! :)
@Ronan, many thanks indeed. I believe you explained that previously but I had forgotten.