Following on from a closer examination of house prices in the various parts of Galway and Dublin comes the Rebel County of Cork. Some “stylized facts” that were reinforced by the analyses of Galway and Dublin cities were that the more expensive areas were being hit hardest. In Galway, those areas also started to fall earliest.
What about Cork, then? Well, as its county’s nickname would suggest, the pattern is not so clear in Cork! The graph below shows the seven most frequently occurring areas for four-bedroom homes in Cork. As you can see, it’s a bit of jumble – the largest fall from peak is actually not in the more expensive areas like Bishopstown and Rochestown, it is in the second cheapest area, Glanmire. There, the median four-bedroom home, which was looking for €465,000 in late 2007 is now asking for €130,000 less – or almost 30% – at €335,000. This is about three times the euro fall of the city centre area, which has only fallen 10% in the same period. (Cobh, just outside the city, is slightly cheaper again and has also fallen by about 30% from the peak.)
At the top end of the market, homes in Bishopstown have indeed been significantly discounted – by 22% from the peak – but in Rochestown, while prices were lower in late 2008, they were just 10% off peak prices in the first half of 2009. Perhaps even more interesting is the stickiness of house prices in Douglas, a mid-tier suburb. The asking price of the median four-bedroom in Douglas has stayed within a narrow band of €460,000 to €495,000 since 2006. The fall from the peak there has been just 5%, a different world from the fall of over 35% seen in similar properties on a hill overlooking a city, Killiney in Dublin!
Clearly, the theory of homes at the top end of spectrum, whose value is more determined by confidence than wage/interest rates, being hit harder at the moment was never going to survive untainted by exposure to the data. Nonetheless, the conclusions from Dublin and Galway seemed to give the theory some good support. It is unclear why Cork would be different. If I was straining to do some explaining, as Ned Flanders would say, one could make an argument that the pharma firms that are the lifeblood of Cork’s economy have been one of the few success stories of Ireland’s economy over the past two years.
However, it seems more likely that homesellers and estate agents are using different tactics in different market. Some are probably using low asking prices to tempt in prospective buyers. Others may try instead to use close to peak prices and then see what discount-from-peak offers they get.