It appears that it will be the end of September 2012 before the Property Services Registration Authority starts to produce the much-anticipated House Price Database which will show the actual sales price of residential property sold in Ireland since 2010. It can’t come soon enough because at present, the best we have is the monthly Residential Property Price Index produced by the Central Statistics Office (CSO). This Index uses data from eight mortgage providers to determine movements in price, and in a country which has suffered one of the worst property prices declines in history, the data produced by the CSO each month is devoured by a public otherwise starved of hard data. The problem with the CSO’s index however, is that its calculation excludes cash transactions. The latest hard data we have on cash transactions is from 2009 when just 6% of all residential property transactions were exclusively in cash. Anecdotally that 6% segment has rocketed as Ireland has slipped deeper into property price depression, and at the start of 2012 there were suggestions from estate agents that the cash portion of the market might be 20-35%. And a couple of weeks ago, Ireland’s biggest estate agents Sherry FitzGerald claimed that the cash component of the Dublin property market was 40% – they notably didn’t say what the cash component was nationally.
But good news today as Minister for Finance, Michael Noonan says that it should be a “matter of weeks” before the CSO provides monthly information on the overall size of the residential property market. Right now, the Revenue Commissioners are, together with the CSO, at the “advanced testing” stage for the transmission of current data on all sales. Minister Noonan was responding yesterday from the Sinn Fein finance spokesperson Pearse Doherty and the following is the full exchange:
“Deputy Pearse Doherty: To ask the Minister for Finance if he will explain the reason there have been delays in the provision of house transaction information by the Revenue Commissioners to the Central Statistics Office (details supplied); and if he will advise when the Revenue Commissioners will start providing this monthly information to the CSO in order that the CSO can provide a monthly total of cash and mortgage based transactions to further improve transparency in the residential property market and provide context to the CSO’s monthly residential property price index which is based solely on mortgage transactions
Minister for Finance, Michael Noonan: I am informed by the Revenue Commissioners that they transmit an extensive range of data to the Central Statistics Office (CSO) on a regular basis and have well-established, effective systems and liaison arrangements with the CSO for that purpose.
The two organisations have been working closely together to secure the transfer of data relating to house transactions from the Revenue Commissioners’ e-Stamping system. The Information Technology (IT) systems necessary for this are now built and are currently in advanced testing. Assuming test results are satisfactory, the Revenue Commissioners expect to be in a position to commence transmitting live e-Stamping data to the CSO within a matter of weeks.”
It will be next week when the CSO issues its Index for June 2012, but the hope here is that at the end of August 2012 when we get the July 2012 data, that we can get a strong sense of the cash component of the market.