Archive for December 20th, 2011

This morning has seen the publication of the ninth CSO residential property price indices for Ireland. The inaugural series was published by the CSO on 13th May 2011 and covered the period from January 2005 to March 2011. This morning’s release covers the month of November 2011. Here’s the summary showing the indices at their peak (various months in 2007 depending on type of property and location), the NAMA valuation date (November 2009), a year ago (November 2010), December 2010 (end of last year, start of this year), last month (October 2011) and November 2011.


Now that the Permanent TSB/ESRI has abandoned its quarterly house price index, the CSO’s isIreland’s premier index for mortgage-based transactions. It analyses mortgage transactions at eight financial institutions : Allied Irish Banks, Bank of Ireland, ICS Building Society (part of the Bank ofIrelandgroup), the Educational Building Society, Permanent TSB, Belgian-owned KBC, Danish-owned National Irish Bank and Irish Nationwide Building Society. The index is hedonic in the sense it firstly groups transactions on a like-for-like basis (location, property type, floor area, number of bedrooms, new or old and first-time buyer or not) and then assigns weightings to each group dependent on their value to the total value of all transactions. The index is an average of three-month rolling transactions.

Last week, the Government presented to the Dail some stamp duty figures for property transactions in 2010, which gave some reason to hope that we might find out from the CSO today the 2010 split of cash-to-mortgage transactions. Unfortunately the CSO doesn’t yet have this information. However Niall O’Hanlon from the CSO said that the organisation expects to receive monthly data in stamp duty returns from around the middle of 2012, and that this will allow the CSO to produce a regular analysis of the size of the market including the split between mortgage and cash based transactions.

As for the key questions:

How much does property now cost in Ireland? The CSO deliberately doesn’t produce average prices. The former PTSB/ESRI index did, and claimed the average price of a property nationally hit the peak in February 2007 at €313,998, inDublin in April 2007 at €431,016 and outsideDublin in January 2007 at €267,987. If, and it is a big “if”, you were to take PTSB/ESRI figures as sound and comparable to the CSO series, then these would be the average prices today:

Nationally, €168,669 (peak €313,998)

In Dublin, €199,325 (peak €431,016)

Outside Dublin, €154,176 (peak €267,987)

I don’t think the CSO would be happy with this approach but it seems to me that the PTSB/ESRI series as represented by its historical indices closely correlates with the performance of the CSO indices.

What’s surprising about the latest release? Apartment prices inDublin were up 4.7% in the month (though still down 16.1% in the past 12 months). Apartments nationally were up 2.7% in the month (though still down 16.9% in the past 12 months).

Are prices still falling? Yes, and the 1.5% month decline nationally in November  2011 is in the same range as the 2.2% decline in October 2011, the 1.5% decline in September 2011 and the 1.6% decline in August 2011.

How far off the peak are we? Nationally 46.3%% (48.3% in real terms as inflation has increased by 4% between February 2007 and November 2011). Interestingly, as revealed here,Northern Ireland is some 44% from peak in nominal terms and 52% off peak in real terms. Are forbearance measures by mortgage lenders, a draconian bankruptcy regime and NAMA’s (in)actions distorting the market? Or are cash transactions which are not captured by the CSO index so significant today that if they were captured, the decline in the Republic would be even greater?

How much further will prices drop? Indeed, will prices continue to drop at all? Who knows, I would say the general consensus is that prices will continue to drop. This is what I believe to be a comprehensive list of forecasts and projections for Irish residential property [house price projections in Ireland are contentious for obvious reasons and the following is understood to be a comprehensive list of projections but please drop me a line if you think there are any omissions].

What does this morning’s news mean for NAMA? The CSO index is used to calculate the NWL Index shown at the top of this page which aims to provide a composite reflection of price movements in NAMA’s key markets since 30th November 2009, the NAMA valuation date. Residential prices are now down 25.3% from November, 2009.  The latest results from the CSO bring the index to 829 (20.6%) meaning that NAMA will need see a blended average increase of 20.6% in its various property markets to break even at a gross profit level.

The CSO index is a monthly residential property price index. Irelanddoes not yet have a publicly available register of actual sale prices, but legislation to give effect to such a register is presently before the Oireachtas – read the latest on the House Price Register here. There are three other residential price surveys, based on advertised asking prices or agent valuations – for the latest see here. Lastly the Department of the Environment, Community and Local Government produces an index based on mortgage transactions, six months after the period end and not hedonically analysed.


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It is reported by both the Irish Times and Irish Independent today that the Wexford construction and development company, Cleary Doyle, has been placed into receivership at NAMA’s behest. Founded in 1961 by Eugene Cleary and John Doyle, the company has a long history of residential and commercial development, both in its own right as a development company and as a construction company acting for developer clients.

As well as the construction of the Joe O’Reilly’s Killeen Castle golf club and the Wexford Opera House, the company has notched up an impressive portfolio of residential developments including Clonard Village (Wexford), Clonattin Village (Gorey, Co. Wexford), Avoca Wood (Avoca, Wexford), Village Gate (Ballycanew, Co. Wexford), Glencove (Courtown, Co. Wexford), The Ramblings (Piercestown, Co. Wexford), The Gallops (Naas, Co. Kildare) and Bakers Yard (Portland St. Dublin 1). Its commercial developments have included the ESB headquarters (Garrycastle, Athlone, Co. Westmeath),WexfordRetailPark.

The receivership has yet to be published in Iris Oifigiuil. The press today reports that the company is “disappointed” with NAMA’s decision and that it had hoped to trade through the current difficulties. NAMA is reported to have said the receivership move was “a last resort”.

Reporting so far does not tell us who the receiver is, or if Cleary Doyle group companies are affected – these include Trinity Hire and Wexford Block.

Remember you can see a comprehensive list of Irish foreclosure action by NAMA here and in this regularly updated spreadsheet.

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