The latest Daft Report is out today, a review of asking prices for residential property during 2009. You can find all the main details, along with a full commentary on the latest figures, and on the future of the property market, from Alan McQuaid of Bloxham Stockbroker over on the daft site. Here’s a brief overview of the headlines:
- Asking prices fall a further 5.5% during the final quarter of 2009: falls in asking prices did not slow down in the final quarter of the year, with the fall of 5.5% similar in size to falls earlier in the year.
- Time to sell now falling in most parts of the country: in most parts of the country, the typical property now takes about 9 months to sell, while in Leinster the figure is 7 months and in Dublin four months.
- The total stock of properties for sale is lower than a year ago but remains high: the stock of properties for sale nationwide is about 3% lower than a year ago but remains above 60,000 units, while in Dublin it is about 17% lower.
As you can see, Dublin has very different headlines to most of the rest of the country. Here are the headlines for the capital:
- Asking prices across Dublin are typically 35% below peak levels on average – from a peak of almost €460,000, the average price is now less than €300,000.
- Prices in Dublin city centre have fallen by double-digit rates in three of the four last quarters and are now 43% below peak levels on average.
- The typical time to sell in Dublin has fallen from 5.4 months in May to 4.1 in December, compared to an average of 3.1 during 2008.
- The total stock of properties available for sale in Dublin has fallen by 17% during 2009, the largest fall of any region in the country.
Some of the headlines for the rest of the country are as follows:
- Asking prices in Leinster are now about one third below peak levels, on average, with some counties such as Louth and Westmeath seeing falls of closer to 40%.
- The total stock of properties for sale in Leinster at the end of 2009 was 5% below a year previous, and is now similar to levels in May 2008.
- Prices in many of parts of Munster, including Cork and Waterford cities and county Clare are about 30% below peak levels.
- In some parts of the province, such as Limerick and Tipperary, asking prices are less than one quarter below their peak, on average.
- The total stock of properties for sale in Munster at the end of 2009 was slightly higher than a year previous (20,100 compared to 19,900) – it is the only region that has not seen some fall in the stock for sale.
- Asking prices in most parts of Connacht and Ulster fell by more than 5% in the final three months of the year and are now about 30% below peak levels.
- There were larger than average falls in Mayo and in Monaghan, while in Donegal, prices were actually close to static in the final quarter.
- The typical time to sell in Connacht/Ulster has fallen back from peaks of over 13 months in September to 11.7 in December. This compares with 8 months in late 2008 and 3 months in late 2007.
About nine months ago, I tried to estimate the total value of Ireland’s residential property, based on the 2006 Census and current asking prices. I found that the housing market had lost about €100bn in value based on the falls up to that point. An updated estimate of the value of Ireland’s residential property is below, based on the latest asking prices and completion statistics (the latter coming from the Department of the Environment). The value of Ireland’s residential property is now about €393bn, almost €180bn below what it would have been, had peak prices been maintained. (The increase in the light brown series reflects newly completed homes.)
So, what prospects for the year ahead? Given that I’ve put my head in the noose already with a range of predictions for 2010, I suppose I might as well spell out my thoughts on the property market in 2010:
- The overall determinant of house price changes will be the stock sitting on the market. As per above, that’s more of an issue outside the main cities. In Dublin, more significant falls in the stock for sale may lead to a levelling off in house prices by Q3, particularly if…
- Rents start to level off in the big cities by mid-year. The stock for rent has risen hugely since 2007, but so – in a more hidden fashion – has the number of rental properties changing hands each month. It seems that the number of renters leaving Ireland is being outweighed by the number of would-be first-time buyers who are staying in rented accommodation longer. Rents will probably find a floor somewhere about a third below their peak levels, and at levels comparable to rents in the late 1990s.
- This will give house prices a benchmark, in that those who look at property as an income stream have something stable to work off for yield purposes.
- All this will happen in Dublin, and either contemperaneously or shortly after in the other cities, before it happens elsewhere. As a result, it’s hard to see anything other that an ongoing bit-by-bit falls in the smaller markets, where volumes will be thin on the ground. Sellers here are likely to continue to do what they’ve been doing up until now – let the cities find out where the floor is and follow them down.
- A national average fall of 15% this year will probably hide a levelling off in at least some parts of Dublin (and maybe the other cities), due to ongoing falls in other parts of the country.
Now, let’s sit back, wait and see how wrong I am!