As I mentioned in my earlier post today, Ireland has –at long long last – a public property price register. I also mentioned that it is a tricky business to extract any meaningful signals about the market as a whole from a database that has no structured information about location (other than county), never mind the property’s attributes, such as size, type, number of bedrooms, bathrooms, etc.
“Tricky” is not the same as “impossible”, though, so in this post, I’ve assembled a few facts and figures about the market, based on the 50,000 market-price transactions that have taken place since January 1 2010.
The IMF effect
The key use of the property price register, when talking about analysing the market as a whole, is the information it contains on the volume of transactions. The picture that emerges is a tale of two halves. The first half is the what happened in 2011 compared to 2010, the IMF effect as the economy in general and property market in particular adjusted to life in bail-out Ireland.
The impact on volumes was clear. The number of transactions in the first half of 2011, at just over 7,000, was 20% lower than the same period in 2010, when it was just over 8,800. Dublin in particular was hard hit by the uncertainty, with the number of transactions down 31%, from 3,100 to 2,100.
The first half of 2012 has been a period of regaining lost ground, with the total for the six months to June 2012 of 8,740 very close to the 8,800 two years previously. Dublin has been driving the higher volume of transactions, with over half of the extra 1,700 transactions occurring in the capital, but in general the increases in 2012 just offset the losses of 2011.
An overview of the volume of transactions by broad region is shown in the graph below.
A first look at prices
Using a property price register to say anything at all about what has happened prices in the market as a whole is a game fraught with dangers. The most solid statistic is the median (or typical) price, i.e. the one with as many transactions cheaper than it as more expensive. It is quite different to the mean (or average) price, which will be skewed if one property sells for €100m, compared to €10m.
The picture that emerges is one probably far removed from the expectations of conspiratorial types who believed that everyone from the CSO to myself was involved in over-stating (or fabricating) a recovery in the property market. If anything, recent reports have understated the extent to which prices have stabilised. The first graph below shows the median price per region per quarter. The stability since the start of the year is notable, particularly when contrasted with free-falling prices in 2011. Also notable – with the exception of Q2 2012 – is the much smaller rate of decline in prices in Dublin than in other regions of the country. Since 2010, prices are down 20% in Dublin but 30% elsewhere.
The second graph below condenses this change in conditions since the start of the year. It shows the percentage change in median price between Q3 and Q1, for 2010, 2011 and 2012. Conditions worsened in 2011, with the national median price falling 7% between Q1 and Q3 2011, compared to 6% 12 months previously. By contrast, median prices have risen by 2% between Q1 and Q3 2012. Do not adjust your sets: yes, I wrote “prices have risen”!
Suspicious types should be asking themselves why I chose the rate of change between Q1 and Q3, rather than the more obvious Q2 to Q3. Using Q2 instead would suggest a 14% increase in Dublin prices in just three months. Would anyone believe me if I said that?
That highlights the limitations to using the property price register for any sort of price analysis, even the (hopefully) careful median price analysis I’ve done above. The reason why a median price might shift 14% in just three months relates to the limitations of the data: we know nothing about the attributes of the properties in question. So maybe 3-beds formed a bigger chunk of the Q2 market while there were more 4-beds in Q3. Or perhaps conditions improved in South Dublin, and it formed a much bigger chunk in Q3 than in Q2. Ultimately we just don’t know.
It seems such a shame that having all this transaction price information out there, we can’t undertake any meaningful analysis of trends in prices… yet. I’m working with the tech guys at Daft and we’re hoping to match up addresses of property listings and property transactions. That way, we would know lots more about the properties sold, such as exact location, property type, and number of bedrooms and bathrooms. While this would inevitably be just a proportion of all transactions, and a small fraction of all listings, it would still allow the calculation of a substantive mix-adjusted price index of transactions, which would be a companion to the already existing asking price index.
Wish us luck!