The latest daft.ie House Price report was released this morning. It shows that asking prices have fallen 5.7% in the last three months and by almost one quarter since their 2007 peak. New figures on time-on-market are showing a growing gap between urban and rural markets, with properties in Dublin in particular falling more and moving faster and in greater numbers. Read more
Simple economic models often beat complicated ones. Figures from the last 25 years show a very strong relationship between the change in the unemployment rate and the change in house prices. This gives hope for those anticipating house prices to level off in late 2010 or 2011 – assuming oversupply has been priced in by then. Read more
The volume of transactions may be a good indicator of how overheated a property market is. Figures on completions, housing stock and mortgage approvals allow an estimate of the number of transactions by county. The figures for 2005-2008 show a set of counties – including Laois and a mid-west corridor – where almost 30% of properties were traded in that period. Sure enough, these figures correlate very highly with the percentage of properties currently for sale in each county. Read more
Yields are a vital indicator of the health of a property market. Dublin yields on residential property have fallen steadily from 7% in the late 1990s to about 3.5% in 2008. Realistically, they will need to settle at some level closer to 5.25%. With rents looking like falling 33% from peak values, this suggests a fall in house prices from peak values of 60%. Read more
With CPI figures showing inflation at -5%, the real return on saving has climbed to a 16-year high. A property-specific real rate of interest can be calculated from the mid-1970s on. It shows that over the whole course of the Celtic Tiger period, real property interest rates were negative. The real cost of borrowing for property now, however, is 15% – higher than at any point for which we have the figures. Read more
Figures from this blog on the rent-or-buy decision featured in today’s Irish Independent and have started some discussion on the most important factors for current prospective first-time buyers. This post includes a poll asking for your input on the topic, which will inform future posts on the topic. Read more
In this post, I take a look at the maths behind buying or renting. Amazingly, even in heady market of 2006, it was cheaper to buy than rent. With rates back down at very low rates, and generous mortgage interest relief, it is once again cheaper to buy than rent – and looks set to stay that way, unless there are significant changes to the tax system. Read more
A review of the latest trends in Ireland’s residential lettings market, from the Q1 2009 Daft.ie Rental Report, including a map of the changes in rents by county. Read more
Ireland’s property market is currently in rewind. Homes now are at March 2005 values – or July 2004, if asking prices are 10% above closing prices. Figures from daft.ie, the Census and the Dept of the Environment allow an estimate of both the number of homes now worth less than when they were bought – about 725,000, or 40% of homes – and how many of those are in negative equity -about 340,000, or 20% of homes. Read more