High-end residential estate agent, commercial agent and all-round property services company, Knight Frank last week released its quarterly league table of global house price movement which show that Ireland continues to experience close-to-the-worse performance (the press release is here which shows the full league table). Our 11.9% annual decline is just below the 13.9% decline in Russia, but Russia aside we are ahead of the rest of the world, in most cases by a substantial margin.
In the EuroZone, Greece has dropped 5.7% in the past year, Spain by 4.6% and Portugal by just 1.8%. As discussed here on Saturday, Spain might well be the country to watch because even with the 4.6% annual decline, it is still just 15% off peak.
The report reminds us that there is still strong growth in some parts of the world. Poland and China are building up quite nice little property bubbles with prices up 8.6% and 8.4% respectively in the past year. In the EuroZone, France tops the league with 8.7% annual growth. Germany and Italy experienced modest movement of 1.3% and minus 1.4% respectively. The UK is essentially flat at minus 0.2% but with inflation running at more than 4% per annum, the real decline is considerably more. The US decline continues and prices there are down 4.9% year on year.
For Irish that invested overseas during the boom the news is mixed with the United Arab Emirates (including Dubai and Abu Dhabi) down 8.2%, Bulgaria down 5.6%, Croatia down 3.8%, South Africa down 1.8% but Turkey was up 3.5%.
Lastly, the top performer was Hong Kong where prices were up 24.2% followed by India at 21.9%. I wonder if we will ever again see such positive growth here.
NAMA Wine Lake 
Any idea of where we can find a long-run time series for household income in Ireland or anything similar? I’m trying to calculate a house price-to-household income ratio to see where Irish house prices currently are relative to income but it’s extremely hard to find, the CSO’s website is really useless – they don’t seem to have a single time series that runs for longer than 10 years.
Agree the CSO site is hard work…
Try the World Bank site:
http://data.worldbank.org/country/ireland
… and follow the “download data” link
They have long series on a bunch of stuff in the same spirit as household income — e.g. final household consumption expenditure since 1960
In a financial drought, its hard to say what anything is worth, especially property.
Bursting of the property bubble, market over correction, long term property value trends etc. All this is meaningless if the banks vault is empty.
A house on Butterfield Aveune might have been worth over a million some years back, suppose it dropped to 50K, if the bank does not have 50K to give out then you are not going to be able to buy it, unless you have the cash under your mattress.
As for rental yields, talk is thrown about in the media of 7% yields and so on. Nothing is ever mentioned about NET yields. The cost of providing a house to a tennant, taxation on a loss, and the banks ramping up interest rates (around 5.5% for some mortgage providers) with the outlook for even higher rates over the next few years.
I cannot see the property market recovering for a very very long time. In fact even if you got a 100K house for free, and offered it to a tennant for 650E a month you would struggle to make money after all your effort. You would be better off just putting it on deposit.
Average rental yields are at barely 4% according to Daft. I don’t know how they calculate that but I assume it’s a gross yield. Calculating taxes, maintenance costs etc is always messy.
As for the deposit, if it’s in an Irish bank I don’t know whether it’s much safer than in a house…
What news — how not to gasp —
http://www.bloomberg.com/news/2011-06-20/euro-area-scraps-esm-seniority-for-greece-ireland-portugal.html
“Bonds issued by the eurozone’s new €500bn rescue fund on behalf of Ireland, Greece and Portugal will not enjoy preferred creditor status”
correct me if i am wrong, but i seem to remember that it was precisely the eurozone announcement last fall that post 2013 eurozone bailout loans would enjoy seniority above private creditors that sparked the steep sell-offs which eventually led to the irish bailout? and now they’re telling us, sorry, that was a mistake, we didn’t really mean it?
want to send Angela a post card?
@NWL
have you seen the HF lawsuit — served Fri and leaked today? if not, would you like a copy?
@Reg, no not seen that. Yes would be grateful for a copy, the email address is under the About tab (don’t reproduce it in comments lest the spambots find it). There is a concluding bondholder post coming but have been waylaid.
By the way, have you seen this from Ireland’s Sunday Business Post
http://www.thepost.ie/news/ireland/government-prepared-to-sell-large-stake-in-boi-57016.html
yep, yep saw it
the strategic investor wants to buy post LME — of course they prefer a bank without all that subdebt; and are happy the goobment do the dirty work! : )
the situation is so tense and so full of twists and turns every 15 minutes, all my children’s pedestrian dull by comparison :) of course you can’t keep up — ten of you could not!
i can’t get over Angela. if it weren’t for the stupid seniority BS she dreamt up last September, ireland might not have had to take a bail out, BoI would be financing itself fine, and i would be sitting pretty on my bonds. why, i’d use the coupons to take a holiday in Dublin!
btw, i share fully in your outrage over the interest rate: it should be -3% as a reward for ireland taking it upon herself to save Europe from her diseased banks
and you are right that there is a point at which it’s no longer worth paying your bad banks’ debts; but i think that number is a lot higher than people like yourself are inclined to think; we have not seen in europe a proper devaluation cum banking collapse in several generations, so have forgotten to fear them. but ask the argentines all will tell you today that they should have stuck with the IMF program.
retrospective, like.