With over 4,000 members in Ireland, the Society of Chartered Surveyors Ireland (SCSI) annual survey into the state of the property market in Ireland together with an outlook for 2012, is worth reading. The 17-page report is being generally published today, and it looks at both residential and commercial property. The report is here and there is an accompanying press release here.
In general the report confirms the decline in prices that has been reported elsewhere, though residential declines in 2011 are seen as slightly smaller than in 2010. Interestingly, the report does highlight the fact that agricultural land has, to a large extent throughout the country, stabilised in price. The report suggests, without confirming numbers, that cash has assumed a greater role in residential purchases – there is now a pattern emerging from statements by Sherry FitzGerald, DNG, Karl Deeter, the former boss at the SCSI and others of cash transactions comprising 25-35% of the total residential market which may prompt questioning of the monthly CSO series which excludes cash transactions.
What is surprising in the report?
Residential prices fell and the consensus outlook is that prices will decline 60-70% from peak – if the CSO decline of 47% to the end of December 2011 is accurate, this would indicate 25-43% decline – yes 43%, if peak was 100, current prices are 53 and the bottom is 30, then the decline from today’s prices is 23/53, or 43%, from current values.Dublin is expected to reach the bottom and recover before rural areas.
Residential rents fell in all parts of the country except Dublin where rents actually rose by 0.8% over the year – this is at odds with the most recent CSO figures which show private rents rising by 3% nationally in 2011.
Office rents fell by 10-15% during the year, and whilst it still reportedly costs €30 psf for prime 3rd generation space in central Dublin, you can get prime 3rd generation space in Connaught/Ulster for just €6psf. Yields – simplistically annual rent divided by the price of property – increased everywhere during the year and now range from 7.5-10.1%
Retail rents are down 10-20% in general except Neighbourhood Shopping Centres and Retail Warehouses where rents actually increased substantially – “this finding is indicative of the fact that retail units on the outskirts ofDublin are appealing more to retailers than prime and city centre units”. Yields are up slightly on the previous year in nearly all retail subcategories.
Pubs and hotels dropped in price during the year but the declines varied widely from just 2% for hotels in Dublin to 45% for hotels in Connaught/Ulster.
Industrial space rents all fell during the year by about 10-20% and yields all grew to an average of over 10%
Development land continues to tumble in price with an average decline of about 30%. The report doesn’t describe the drop from peak, but the implication is 90%+.
Agricultural land has generally stabilised in price, and in some areas there is evidence of increases eg 5% increase inMunster.
NAMA Wine Lake 
Interesting statistics and very relevant to NAMA’s objective to produce a profit on the acquisition cost of its loan book. This market will never do anything other than fall until liquidity is introduced.
“Retail rents are down 10-20% in general except Neighbourhood Shopping Centres and Retail Warehouses where rents actually increased substantially – “this finding is indicative of the fact that retail units on the outskirts of Dublin are appealing more to retailers than prime and city centre units”.
It is not too surprising that retail rents are up given that tenants are tied in to upward only leases and have had their rents reviewed upwards. In place of those faceless statistics picture men and women with their arms twisted half way up their backs. And, who are the shadowy figures behind their backs, none other then the members of the Society of Chartered Surveyors of Ireland. What we need from this organisation is a big mea culpa for the destruction they have caused to and are continuing to cause to Irish businesses and jobs not more of their irrelevant statistics. “Lies, damned lies, and statistics” .
We wouldn’t expect any better from the SCSI, they are nothing if not consistent.
They lobbied to retain UORRS in future leases and lobbied the government not to keep their promise and ban them in current leases. This despite the fact that they are supposed to be non partisan in arbitrations. They should be removed from the arbitration process which they have been complicit in corrupting. They follow the money/fees, at a huge cost to the nation. New name for them now – Society of Chartered Enforcers of Ireland.