With the launch yesterday of a property price register in Ireland, we are now close to drawing a line under the relevance of the various asking price and estate agent notional valuation indices which prevailed for so long. Before saying “Good Riddance!” to the old price surveys, it might be worth stopping to thank those who have shed some light on residential property prices for so long whilst Officialdom prevaricated over the introduction of the property price register. For years, the good people at DAFT and MyHome in particular have given us an insight into price trends nationally and regionally and provided informed commentary. Time and money has been expended in the private sector to bring us some limited transparency.
Thank you, all.
But between asking prices which yesterday’s property price register demonstrates are all over the place, Marian Finnegan’s real/nominal and second-hand home dance and the lack of transparency in estate agent valuations which would otherwise be criticised for not being partial, for off-market transactions being ignored, for all of those reasons – Good Riddance! And before you feel too sympathetic for these sources, remember they should be financially compensated with the increased transaction levels which should pertain as a result of the transparency revealed in the property price register – asking prices should be more realistic, there should be less scope for protracted negotiations and buyer/seller expectations should be more closely matched.
So this is likely to be the last roundup on here because by January 2013 there should be some entrepreneurial move to create an index based on settled prices .We now have the quarterly reports and announcements from DAFT, MyHome and Sherry FitzGerald . Lisney may release its figures later this week, and DNG seems to have cropped up late in the day with its own survey which wasn’t tracked on here before and isn’t now given the imminent obsolescence of all of these surveys.
(1) At a national level, prices dropped 0-3% in quarter three of 2012 and 12-14% in the last year and are now 50-57% down from peak.
(2) In Dublin, prices fell 1% according to DAFT, but according to Myhome and Sherry FitzGerald were up 1-2% in the quarter. Annually Dublin prices are down 6-14% and are down 55-60% from peak.
(3) DAFT.ie and Myhome.ie both provide 26-county-by-county results.
(4) All sources indicate supply levels are stable at national level but have reduced in Dublin.
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 inIreland 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 in Ireland.
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)