[…] Report Ronan Lynos has details of the Daft report. Asking prices fall a further 5.5% during the final quarter of 2009: falls in asking prices did not […]
Related to your total value of Ireland’s residential property calculations: Based on new instructions to agents, we calculated the total advertised value of the Dublin second-hand property market (including Bray-Greystones axis) in 2006 as €11,828,064,973. Same calculation for 2008 was €7,824,746,845.
Ronan its great to see an economist putting their head on the line and predicting the bottom. The question now in my opinion is how informationally efficient the Irish Property market is. Will consumers and investors start purchasing again based on the information were beginning to see.
How do these figures compare with the PTSB report that was out the other day suggesting that average house prices had fallen 27.6% since February 2007? Is there a big difference (I’m not sure if I’m comparing apples with apples so just looking for a professional opinion – are we being told one thing by one group and something else by another group?).
Based on what I have seen locally (north county Dublin), the average drop is way below 27.6%. I would say closer to 45 even 50% (my own cost me 400k right at the peak and two doors down was sold for 195k recently by a landlord who needed to shift it fast – good job I view my house as a home and not an investment eh?) but there are also many cases of some people not moving their asking price and nobody going to view because it’s clearly too high in the current market (i.e. a disconnect from reality).
Also I just spent the last two weeks in Donegal and I was amazed at how much prices have come down since summer 2008 when I was last up there. Prices back then starting with a 3 now starting with a 1 (and not even high 1’s).
Does anyone have access to actual selling prices in Ireland rather than asking prices? That would seem a far more reliable indicator of what’s really been going on over the past two years.
I think the bottom has some way to go yet – maybe it will plateau for a while but once unemployment gets to 13% (which even the government confirms?) there may be a ‘double dip’ as there are bound to be a number of repossessions and cheap stock hitting the market that will drag it down again overall in late 2010/early 2011?
Sorry to sound so gloomy but I think there are a lot of people out there in the property business who perhaps don’t want to face up to reality.
PTSB is probably lagging the market at the moment, due to its nature (mortgage drawdowns, which could be 2/3 months behind agreed transactions) and its source (only ever 20% of the market, and that’s 20% of a very small market at the moment). Hence the fall in asking prices is greater than the fall in closing prices, so measured.
The only people who have access to all sales prices are the Revenue Commissioners who could, if they wanted, suitably anonymise (or not) their data and make it publicly available. Fingers crossed!
A 15% fall in house prices on the Daft measure for this year sounds about right. Unemployment will continue to rise this year to about 14%, the economy won’t show much, if any, growth and mortgage lending will remain constrained. All these factors militate against the kind of recovery predicted by Bloxham’s and point towards a continuation in the fall of house prices. Given that house prices have already fallen by quite a margin, a 15% decline this year is very reasonable indeed.
Kevin
,
14-18 times annual rent or 3.5/4 times average salary.
So for your average 3 bed semi – we need to be looking at ~160K in average parts of the country….
Dublin still around 300k plus, so that means a rental yield of €1350pm, dublin asking prices are somewhere around this at the moment, however nobody knows what rent people are paying….i’d guess in dublin 1000 pm would be a reasonable yield so should be looking at house prices ~260k mark – which is ~13% fall. Howerver, I reckon, a lot of foreigners will leave q1/q2 as the 15months time frame on claiming prsi/job seekers will be up and things will not have picked up as there will be very little building and retail is dead. The same for the single Irish people who will just emmigrate as other places will be picking up by then….
Kevin,
It might interest you to note that in the latest Daft report, the average 3-bed was €175k or lower in 11 counties.
One other thing to note is that it’s 4 times household salary, rather than individual salary, and the typical household has 1.55 earners.
R
Kevin
,
Check average rental prices for dublin1-24. It about 1300 per month according to the q3 report. As with average salary (of 1.55 earners) it is somewhere between 52-50k. That’s 200k. [Also if one adds an average of 2 kids that’s another 300 per month to pay the mortguage, however, i’ll admit I did the calculations very quickly – E&OE!!!) Also, I am in the rental boat waiting for further drops 🙂 In anay case we are both agreed we are looking at ~15% drop this year and that’s conservative. As for Bloxham, can’t workout where they can manage a growth of 10% in housing this year……
[…] In November 2008 the average mortgage was €259,217. This was most likely borrowed at 90% loan to value, resulting in a property purchase price of €288,801. According to Ronan Lyons (Economist with Daft.ie) prices across Dublin (as an example) are down 35%. […]
Daft Report » The Dossing Times ,
[…] Report Ronan Lynos has details of the Daft report. Asking prices fall a further 5.5% during the final quarter of 2009: falls in asking prices did not […]
Paul O'Connor ,
Related to your total value of Ireland’s residential property calculations: Based on new instructions to agents, we calculated the total advertised value of the Dublin second-hand property market (including Bray-Greystones axis) in 2006 as €11,828,064,973. Same calculation for 2008 was €7,824,746,845.
House prices down by up to 43% from the peak - Politics.ie ,
[…] […]
Ralph Smith ,
Ronan its great to see an economist putting their head on the line and predicting the bottom. The question now in my opinion is how informationally efficient the Irish Property market is. Will consumers and investors start purchasing again based on the information were beginning to see.
Ralph
http://www.domybooks.ie/Blog
Joseph ,
How do these figures compare with the PTSB report that was out the other day suggesting that average house prices had fallen 27.6% since February 2007? Is there a big difference (I’m not sure if I’m comparing apples with apples so just looking for a professional opinion – are we being told one thing by one group and something else by another group?).
Based on what I have seen locally (north county Dublin), the average drop is way below 27.6%. I would say closer to 45 even 50% (my own cost me 400k right at the peak and two doors down was sold for 195k recently by a landlord who needed to shift it fast – good job I view my house as a home and not an investment eh?) but there are also many cases of some people not moving their asking price and nobody going to view because it’s clearly too high in the current market (i.e. a disconnect from reality).
Also I just spent the last two weeks in Donegal and I was amazed at how much prices have come down since summer 2008 when I was last up there. Prices back then starting with a 3 now starting with a 1 (and not even high 1’s).
Does anyone have access to actual selling prices in Ireland rather than asking prices? That would seem a far more reliable indicator of what’s really been going on over the past two years.
I think the bottom has some way to go yet – maybe it will plateau for a while but once unemployment gets to 13% (which even the government confirms?) there may be a ‘double dip’ as there are bound to be a number of repossessions and cheap stock hitting the market that will drag it down again overall in late 2010/early 2011?
Sorry to sound so gloomy but I think there are a lot of people out there in the property business who perhaps don’t want to face up to reality.
Ronan Lyons ,
PTSB is probably lagging the market at the moment, due to its nature (mortgage drawdowns, which could be 2/3 months behind agreed transactions) and its source (only ever 20% of the market, and that’s 20% of a very small market at the moment). Hence the fall in asking prices is greater than the fall in closing prices, so measured.
The only people who have access to all sales prices are the Revenue Commissioners who could, if they wanted, suitably anonymise (or not) their data and make it publicly available. Fingers crossed!
Senan ,
Very contrarian statement from Bloxham Stockbrokers suggesting between a 7% and 10% rise in property values in 2010. I saw it reported here (but I can’t find the original reference on the Bloxham website): http://www.irishtimes.com/newspaper/breaking/2010/0108/breaking44.htm
Cathal ,
A 15% fall in house prices on the Daft measure for this year sounds about right. Unemployment will continue to rise this year to about 14%, the economy won’t show much, if any, growth and mortgage lending will remain constrained. All these factors militate against the kind of recovery predicted by Bloxham’s and point towards a continuation in the fall of house prices. Given that house prices have already fallen by quite a margin, a 15% decline this year is very reasonable indeed.
Kevin ,
14-18 times annual rent or 3.5/4 times average salary.
So for your average 3 bed semi – we need to be looking at ~160K in average parts of the country….
Dublin still around 300k plus, so that means a rental yield of €1350pm, dublin asking prices are somewhere around this at the moment, however nobody knows what rent people are paying….i’d guess in dublin 1000 pm would be a reasonable yield so should be looking at house prices ~260k mark – which is ~13% fall. Howerver, I reckon, a lot of foreigners will leave q1/q2 as the 15months time frame on claiming prsi/job seekers will be up and things will not have picked up as there will be very little building and retail is dead. The same for the single Irish people who will just emmigrate as other places will be picking up by then….
Ronan Lyons ,
Kevin,
It might interest you to note that in the latest Daft report, the average 3-bed was €175k or lower in 11 counties.
One other thing to note is that it’s 4 times household salary, rather than individual salary, and the typical household has 1.55 earners.
R
Kevin ,
Check average rental prices for dublin1-24. It about 1300 per month according to the q3 report. As with average salary (of 1.55 earners) it is somewhere between 52-50k. That’s 200k. [Also if one adds an average of 2 kids that’s another 300 per month to pay the mortguage, however, i’ll admit I did the calculations very quickly – E&OE!!!) Also, I am in the rental boat waiting for further drops 🙂 In anay case we are both agreed we are looking at ~15% drop this year and that’s conservative. As for Bloxham, can’t workout where they can manage a growth of 10% in housing this year……
Negative Equity « SmartQuotes.ie ,
[…] In November 2008 the average mortgage was €259,217. This was most likely borrowed at 90% loan to value, resulting in a property purchase price of €288,801. According to Ronan Lyons (Economist with Daft.ie) prices across Dublin (as an example) are down 35%. […]