Both Daft.ie and rival property listings website. MyHome.ie have today published their asking price reports for the last three months of 2012. Sherry FitzGerald have yet to publish their Q4,2012 survey and we are likely to need wait another few days for Lisney’s. But for the time being we just have Daft.ie’s and MyHome’s, and because MyHome’s is exclusively based on asking prices, it won’t be examined here – furthermore MyHome deserves to be criticized for failing to make clear in its summary that it is examining asking prices only even though it refers to the launch of the Property Price Register and at time of writing this morning, the full report link on the MyHome website returns a “404 – File not Found Error”.
On the other hand, Daft.ie’s quarterly report for the first time, examines actual sold prices based on data from the Property Price Register which was launched on 30th September 2012. You can look at both reports yourself to see what they say about asking prices, this blogpost focuses on actual selling prices information provided by Daft.ie. It should also be said that Daft.ie was the first company in October 2012 to examine actual selling prices by region when the PPR was first launched.
The information given by Daft.ie on PPR data is limited and we just get one measly statistic for the quarterly change in Q4,2012 and that is that there was a 0.9% decline nationally. All other statistics are annual, and since Minister Shatter has ruled out extending the PPR to pre-2010 data, we can’t get a peak to current decline. Daft.ie is to be thanked and congratulated for its PPR analysis, but it will shortly find itself with competitors if it doesn’t improve its analysis in this area – for example, would it really have been so difficult to say what the quarterly changes were for Dublin and South County Dublin?
To arrive at an national decline from peak to current, I have taken the CSO’s monthly residential property price index which is based on mortgage transactions only from nine banks, representing the vast majority of Irish lenders, and shows a decline from peak in September 2007 of 130.5 to December 2009 of 92.4 and DAFT says that their index for January 2010 is 150.4 and is 103.4 in December 2012. So marrying the two, we get a decline of 51.3% which is similar to the 49.3% recorded by the CSO for the peak to end November 2012.
As regards demand and supply which is one of the “hard” factors in determining prices – actual building costs, rental yields and affordability would be other “hard” factors which are sometimes overshadowed by “soft” factors like perception of future price movement. The Daft.ie report, authored by economist and now (part-time!) lecturer, Ronan Lyons, says “Nonetheless, all the indications are that a balance has been reached in Dublin – and possibly in the other cities – between supply and demand. With the pull of the cities stronger in the crash, the Government needs to start planning now for building the new homes the cities will need over the coming decade. This may sound odd, as property oversupply still blights much of the country, but the mistakes of the past should not mean avoiding making more mistakes in the future”
The methodology used by Daft.ie to determine price changes based on the PPR is described as follows: “The Daft.ie Price Register Index is based on prices for residential properties recorded on propertypriceregister.ie, for which matches were found in the daft.ie archives. Because these are entered with a lag by solicitors, figures for previous quarters are subject to revision. Figures are calculated from econometric regressions, which calculate changes in price that are independent of changes in observable measures of quality, such as location, type, or size.”
NAMA Wine Lake 
It should be noted that the “lag” in the property price register is more than a quarter. Each update has seen additions to 2010.
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@NAMAWineLake
As Stephen above has highlighted, it is unfortunately not possible to be definitive in relation to quarterly price changes based on the Residential Property Price Register (RPPR), because this is contingent on the timely entry by solicitors of the transaction.
For this reason, quarterly figures for Q4 are not included as perhaps even the majority of transactions from that quarter are not yet included, while a proportion of Q3 transactions may still not be up online. This problem, which results in relatively volatile RPPR figures compared to listings data, becomes significantly more acute when one wants to look at particular city regions or counties, where the number of transactions shrinks proportionately.
In contrast, the year-on-year change will not be subject to revisions anywhere near as violent.
Aside from the practical considerations, year-on-year changes are overwhelmingly the lead barometer of house price changes internationally. As the Irish property market (at least in the cities) returns to some semblance of normality, we should start normalising the discussion of property prices here and move away from the quarterly figures to annual figures.
Hope that makes sense,
Ronan.
PS. Due to the terrible treatment of addresses in the RPPR, it is not possible to match up a significant proportion of transactions in the Register to type, bedroom and bathroom information in the daft.ie archives. Thus, I would recommend maintaining a watch on the CSO index and the daft.ie (and myhome.ie) asking prices indices. Yes, this it the only one that includes cash transactions – but it is still not comprehensive in the sense that I think you hope for.
PPS. I should state that I am not a full-time lecturer! I do lecture at Balliol College, Oxford, but only in a part-time capacity.
@Ronan, hats should be doffed towards DAFT for this latest report, it is a huge undertaking to analyse the asking prices alone, but analysing badly addressed partial data on the Property Price Register is really going the extra mile, but at least we have, based on the limited transactions that can be tied to estate agent details and which can consequently be hedonically analysed, some real selling price data on an annual basis, for which we should all be thankful to you.
Other than the annual figures shown above which were extracted from your report and in the case of SCD from your commentary, have you other annual figures available eg for Dublin city centre, north Dublin, west Dublin districts for Cork, Limerick, Galway cities and Kildare, Wicklow, Meath counties.
Again great work, and even though it is an approximation, it seems the actual decline from peak nationally on a selling price basis from the PPR is very close to the asking price decline and not very different from the decline recorded by the CSO’s mortgage analysis.
@ Ronan Lyons
I appreciate that DAFT do important work in the area of house price analysis but would the organisation ever consider changing its name? The name ‘DAFT’ undermines the research. It can’t be quoted in any academic research without a very large footnote. It’s like a foreigner finding out that the most important and prestigious website for sourcing an Irish lawyer is called http://www.cowboys.ie or something like that.
That said, I’m interested in your view (as reported by NWL) that “a balance has been reached between supply and demand”. As a taxpayer I have a vested interest in seeing property prices stabilise and then rise as it will mean that the banks will not require a further capital injection from the State. Equally, prices in many areas are below replacement cost as construction costs have not fallen – or cannot fall – proportionately so something has to give. On the other hand, other than for a relatively small cohort of the national population (viz. public servants due increments, the approx. 140,000 employed in foreign MNCs) it is difficult to see any scenario where disposable income does anything other than fall in the coming years for the majority of the population. Furthermore, interest rates are at historic lows, credit is restricted, property taxes have been introduced, tax evasion in relation to assets and rental income will likely be addressed, emigration from the population cohort most likely to buy homes appears to remain steady and may increase, and property prices still appear out of line with rental yields. So, given all these factors, where is the demand likely to come from in the years ahead? I would genuinely like to be optimistic on property prices and to see transactions increase but, at the moment, I cannot see what will generate continued and sustainable house price increases
@ NWL
‘… marrying the two together …’ – a pleonasm surely? I haven’t gone away you know (although I have yet to make a cash donation!).
[…] the report includes information from the Property Price Register in a like-for-like manner. As NAMAwinelake has noted, this is the first ever house price index for Ireland that has both the following […]
@NWL
The estimated annual rate of change in house prices, according to the Daft.ie hedonic analysis of RPPR transactions, is as follows for the various regions:
National -8.0%
Dublin -6.8%
Other cities -7.1%
Leinster -1.0%
Munster -12.8%
Connacht-Ulster -18.4%
Please note, however, that this is based only on those transactions in Q4 that were already registered on propertypriceregister.ie by December 19th (the last update by year-end). Thus, it is likely that some of these regional numbers could change substantially by the time the vast majority of transactions are actually registered (say, mid-2013).
The contribution of the Daft.ie RPPR Index is not so much its timeliness – for which I would use the Daft.ie Asking Price Index instead, especially as it is a lead indicator – rather its ultimate comprehensiveness.
@Bunbury
In over 8 years of working on the Daft.ie Report, I’ve never come across a financial analyst or investor not prepared to read it because of the branding! And it may surprise you to know that the report has been quoted without trouble or need for a detailed footnote in a large number of academic and policymaker studies. While it’s beyond my pay-grade, my suspicion is that, as with other online brands, such as Yahoo, the name is an intrinsic part of the brand.
One comment I would make to yourself and to NWL, however, is that it is Daft.ie (or indeed Daft.com if that’s easier to a US audience) – not the rather shouty “DAFT” that appears frequently here.
@ Rónán Many solicitors leave it until the end of the year to file the sales returns with the Revenue, not just for the last quarter but for the whole year. I imagine the information that will become available over the next few months will throw more light on movements, but perhaps will just confirm your comprehensive work.
A national postcode system would get over at most of the mis-descriptions and should happen shortly.
@Niall, the Property Registration Authority recently told me that sales must be filed with six months, but at the start of December 2012, the purchase of 16 Clyde Road for €2.2m in April 2012 was still not registered, and the records had to be obtained from the Registry of Deeds. Six months itself seems excessive but if it is being flouted, it just intensifies the problem of tracking actual property prices, which funnily enough, at official level in justice minister Alan Shatter’s Department, there seems precious little appetite to improve and they seem intent to providing the very bare minimum to meet the condition in the Memorandum of Understanding with the Troika.
@Ronan, thanks for that and the additional item of data for the annual decline in cities other than Dublin of 7.1% and I overlooked Leinster at -1% yesterday, will update table for both.
I can only imagine the work needed to sift through the ever-changing PPR to identify properties for which there might have been a Daft.ie listing and then tying the limited number of successful matches to the estate agent details and working out changes. Well done to you all, this really is a public service, as the asking price index was when there was precious little on non-mortgage sales available officially.
Noted that it’s “Daft.ie” and will ensure it’s referred to correctly in future – always though DAFT was an acronym.
@Bunbury, you’re right on “marry together” – I probably overuse pronouns and adverbs to aid clarity but “together” is probably always redundant with “marry” – correction made!
Technically, like Yahoo (Yet Another Hierarchical Officious Oracle), daft did indeed start life as an acronym – Digital Accommodation Finder Terminal, I think – but that was, like Yahoo, worked backwards from the name they wanted!
I remember Daft well when I was involved in running the Young Entrepreneurs Scheme (YES) for secondary school businesses back in the mid-nineties. It participated in a Dublin Regional Final and was, I think, the first Internet-based business to reach a regional final.
@ NWL In relation to the late filing, can I point in the direction of the December tax figures, specifically CAT & Stamp Duty.
In relation to CAT, December saw €69M returned against a profile figure for the month of just €12M. This would seem to suggest that many solicitors were busy in December clearing their desks of returns which should have been submitted early in the year.
The December Stamp Duty figure, which should be purely a property and share related figure was well ahead of the monthly profile by €18M (24%). This again smacks of solicitors clearing their desks, but also may reflect a temporary burst of property transactions related to the ending of mortgage interest relief.
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