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.”