Ronan Lyons | Personal Website
Ronan Lyons | Personal Website

July 2011

Market thickness matters – insights from the second fire-sale auction

This post analyses the information contained in the recent second “fire-sale” auction of Irish properties. By combining the auction results with an economic model of house prices, it’s possible to estimate how far auction prices are below the peak and below current asking prices. It’s also possible – using the results from the two auctions – to compare Dublin and the rest of the country: while asking prices have fallen more in Dublin, closing prices have fallen by less, and the gap between ask and close in Dublin is nearly half that of elsewhere. This suggests that “market thickness”, information and the proposed house price database matter. Read more

Are we nearly there yet? Finding the new floor for property prices

With the release of the latest House Price Report showing the average house price below €200,000 for the first time in a decade, this post examines three different ways of calculating what house prices in Ireland “should” be. The most straightforward way is to adjust house prices for inflation, but this may not reflect the transformation of the Irish economy since the mid-1990s. Two other methods – comparing to incomes and to rents – both suggest that the average house price should be about €150,000, a fall of 60% from the peak. If this is true, prices may bottom out in Leinster as early as next year and elsewhere by 2014. Read more