Last week saw Ireland’s third property fire-sale. These auctions give a unique set of data-points for property market analysis. This post analyses the third auction, outlining the typical fall from the peak and the yield achieved, one of the most important metrics in the market. It also highlights some interesting trends comparing the auction results with those from previous auctions. Read more
Sparked by some figures by Morgan Kelly and a pseudonymous letter to the Irish Times, the last two weeks have seen an immense public debate on the topic mortgage debt forgiveness. This post attempts to step away from the emotional charge of the debate. It examines ten key facts on Ireland’s mortgage debt, in relation to arrears, repossessions, mortgages being paid off and the labour market. It also presents an estimate of Ireland’s aggregate “loan-to-value” for residential property and a comparison with repossessions in the UK, before I give my own thoughts on the topic. Read more
The latest Daft.ie Rental Report shows that rents nationwide have been largely stable over the past twelve months. This post looks behind these top level figures and explores two issues in particular. The first is the stock available to rent in the cities across Ireland, and whether this will push rents down in coming months. The second is how far the rent-house price relationship has adjusted back to normality in the past four years… and how much more of an adjustment is needed. Read more
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
With the release of the latest Daft.ie 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
This post looks at what foundation stones the Government should put in place to build the next generation of Ireland’s property market. It briefly reviews two that I’ve discussed before – the importance of a national house price register and a land value tax – before outlining two further proposals in more detail. A set-in-stone minimum deposit would greatly reduce the potential for policy to amplify bubbles, while banning variable rate mortgages would not only protect vulnerable households but also reduce the degree to which the economy is subject to ECB-induced recessions. Read more
This post reviews the findings of the latest Daft.ie Rental Report. Rents rose slightly in the first few months of 2011, and the year-on-year change in rents in some parts of Dublin and in Cork city is positive time for the first time since 2008. This post explains how this is both a bad signal but a good sign, and what it tells us about the underlying economy. Read more
Last Friday saw a much publicised “firesale” auction of distressed properties in Dublin. The fact that the prices achieved are known presents an information-starved public with some very valuable information on the current price level in the property market. This post uses a property-by-property analysis of the auction to estimate the fall in prices from the peak and the current gap between asking prices and prices achieved. It also looks at the important question of the relationship between the rent and the house price and shows how this can be used by prospective buyers to inform their decisions. Read more
Today sees the launch of the latest Daft.ie House Price Report, which finds that asking prices fell again in the first three months of 2011, but by one of the smallest percentages since 2008. This post outlines some key findings of the report and then explores a measure of the speed with which properties sell across Dublin, the rest of the Republic and also Northern Ireland. Read more
The cost of accommodation is one of the most important measures of competitiveness for a city or region, as it determines local wages and prices levels. This post compares the cost of buying and renting property in four Irish cities with those of other eurozone cities. It finds, perhaps surprisingly, that Irish cities are very competitive – and getting more so. Read more