With the introduction of the House Price Database due by June 2012, which should ensure all transactions – cash and mortgage – are publicly available, I hope we can finally wave “Good Riddance” to asking price and estate agent valuation indices in Ireland. That’s not to say the accompanying narrative isn’t interesting or valid, it’s just that it is faintly ridiculous to have so much analysis of what are asking prices or valuation estimates. DAFT says prices in Longford rose by 10% in Q1,2012 and prices in Carlow fell by 10% – no doubt, that’s what asking price data is saying, but does anyone believe it?
But for now 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. Here’s the overview.
(1) At a national level, prices dropped 2-7% in quarter one of 2012 and 16-21% in the last year and are now 47-61% down from peak.
(2) In Dublin, prices dropped 4-8% in quarter one, according to Myhome and Sherry Fitzgerald but rose by 0.3% according to DAFT. In the past year prices have declined 18-22% in the last year and are now 54-66% down from peak.
(3) DAFT.ie and Myhome.ie both provide 26-county-by-county results.
(3a) DAFT.ie says that for Q1, 2012, Carlow recorded the biggest quarterly decline with prices dropping 10.7%. On the other hand, prices in Longford rose by 10.4% in the quarter.
(3b) Myhome.ie’s county analysis PDF is corrupted so the following is for 4-bed semi detached property. Laois fell by 27% in the quarter and Kerry rose by 2.5%. In the past year Laois has fallen by 34% and Monaghan has risen by 8%.
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. The change to the national average price 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.
(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 in Ireland from leading estate agents nationwide. The series in this report have been produced using a combination of statistical techniques. Their data is collected from quarterly snapshots of active, available properties on MyHome.ie. Their main National and Dublin 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. Their 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 the Dublin 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 for Dublin 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 index is a valuation assessment index (akin to how SCS/IPD and JLL compile the commercial property indices as far as I can see)
In addition to the above surveys, 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 from the CSO and is issued monthly and is an hedonic index but only based on mortgages at nine Irish lending institutions. The bill giving legislative effect to House Price Database – called the Property Services (Regulation) Bill – has now been approved and should see a Database available from mid-2012 which will have historical prices from 2010.
In terms of outlook for property prices, who knows? This blog’s predictions for 2012 are here. These are the latest predictions/projects captured on here which I believe to be a comprehensive reflection of reported predictions and projections, though if you feel there is any omission, please contact me so that I can update the table; house price projections in Ireland can be a vexed subject!