2013: After six years, time to build again?

Ronan Lyons, Economist

2nd Jan 2013

Ronan Lyons, Daft's in-house economist, commenting on the latest Daft research on the Irish property market.

2013: After six years, time to build again?

Ireland is emerging from one of the worst property market downturns in the post-war developed world. Economists typically focus on what are termed "real house prices", i.e. comparing house prices with prices elsewhere in the economy. Studies show that severe housing busts are typically long and brought about in large part by higher prices elsewhere in the economy, and perhaps also a weakening currency.

In contrast, however, Ireland's housing bust has been remarkably rapid and has occurred entirely without inflation elsewhere in the economy. And, by necessity, there has been no devaluation of the currency used in Ireland - which is now continental, not national. In this sense, the Irish crash looks more like a US city or state - such as Detroit or Nevada - than other national housing crashes.

End of the downturn?

How can we say that Ireland is actually emerging from the downturn? In one sense, we can't. In large parts of the country, particularly in Munster, Connacht and Ulster outside the cities, there are still the same symptoms as we enter 2013 - rapidly falling prices (up to 20% in the last year, in some places), a large overhang of houses on the market and only a small proportion of properties selling in four months, a reasonable time in a healthy market, for any property to find a buyer.

Nonetheless, in Dublin in particular, but also in its hinterland and in the other cities, there are a growing number of indications - many of them contained in this report - that the market in late 2012 is by far the closest to stable in a long time.

For example, this time last year, asking prices in South County Dublin were falling at an annual rate of 22%. In the final quarter of 2012, they were actually 3% higher than a year previously. In Dublin city centre, prices fell by 25% during 2011 - but rose marginally over the course of 2012. In contrast, asking prices are still falling rapidly in Munster, Connacht and Ulster. Indeed, for the first time since prices started to fall, the fall from the peak is greater in Connacht-Ulster (55.9%) than in Dublin (55.4%).

There are some who doubt the relevance of asking prices. And yet, these encouraging signals from asking prices are repeated across a range of other indicators. For example, this is the first Daft.ie Report which also includes an analysis of transactions prices, based on the new Residential Property Price Register.

A major limitation of the Price Register is the lack of information on the property sold, for example type or size. For roughly 5,000 transactions in 2012, it has been possible to match back to the original listing on Daft.ie. This enables the like-for-like analysis required to say definitively whether and how fast prices are rising or falling. And the picture is remarkably similar to what is emerging from asking prices. For example, in South County Dublin, the annual fall in prices went from 20% a year ago to just 1% now.

Supply-side issues

Ultimately, prices are the symptom - the outcome of the market process - rather than the cause. To see what will happen next, we must look to what is happening underlying supply and demand. In relation to supply, the total number of properties on the market nationwide is at its lowest in five years.

This is being driven by Dublin, where there are fewer properties for sale than at any point since February 2007. The number of properties sitting on the market has fallen by 50% in the last couple of years. There is now no backlog of Celtic Tiger housing in the capital. Even in Munster and Connacht-Ulster, stock for sale is back at mid-2008 levels, although this represents a fall of 20%, rather than 50%, in the numbers sitting on the market.

Similarly, the Dublin market is showing very healthy figures for the time taken to sell a property. Nationwide, it is now the case that 4 in 10 properties are selling within 4 months, compared to 3 in 10 a year ago. Once again, this improvement is being driven by Dublin, where almost two thirds of properties sell within 4 months currently. There has also been an improvement in time-to-sell in the other cities and in Leinster. In Munster and Connacht-Ulster (excluding the cities), there has been very little improvement in conditions.

Looking to 2013

Looking ahead to 2013, it is clear that the end of mortgage interest relief may have an adverse impact on the market in the first half of the year. Effectively, some of the demand from 2013 was stolen and crammed into 2012 instead. Nonetheless, levelling the playing field between buying and renting long-term is an important step in creating a healthy property market. As is an annual property tax, which is effectively replacing Celtic Tiger-era stamp duty.

Nonetheless, all the indications are that a balance has been reached in Dublin - and possibly in the other cities - between supply and demand. With the pull of the cities stronger in the crash, the Government needs to start planning now for building the new homes the cities will need over the coming decade. This may sound odd, as property oversupply still blights much of the country, but the mistakes of the past should not mean avoiding making more mistakes in the future.

HIGHLIGHTS:

Sale Index
Asking Prices, Residential Sales

Stock and flow of properties
Stock and Flow of Sale Properties


SNAPSHOT:

Snapshot of Asking Prices Nationwide
Snapshot of Asking Prices Nationwide

Discuss This Article

  • Re: The Daft House Price Report Q4 2012

    Posted By: NAMAwinelake Date: Wednesday January 2, 2013 @08:10AM

    Well done Ronan and DAFT, your report is light years ahead of the competition with the inclusion of actual prices. It would be nice though to see actual quarterly price changes.

    For what it is worth, if you marry together the CSO index for Sept 2007 to Dec 2009 and your index for Jan 2010 to Dec 2012, you get a 51.3% decline from peak based on actual prices - mortgage only for the first period with the CSO and mortgage and cash from DAFT for the second period.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anon Date: Wednesday January 2, 2013 @10:04AM

    This may sound odd, as property oversupply still blights much of the country, but the mistakes of the past should not mean avoiding making more mistakes in the future??????????????????????? Typo?

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Pauline Date: Wednesday January 2, 2013 @10:39AM

    Nice article. Perhaps there could be an element you haven't mentioned lurking menacingly on the horizon that really could seriously impact how 2013 evolves from a property market perspective and that is the Personal Insolvency Bill. Could this have a regressive effect on any recovery as more distressed mortgage properties are introduced into the marketplace?

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Wednesday January 2, 2013 @12:03PM

    Your article is very positive in the outlook using "asking" prices as a barometer. However being an investor I can tell you that 100% of the properties that I put in an offer, some at the asking price have all ended up withdrawn for one reason or the other. Noticed that the same properties come back onto the market again after a few months, lately at cheaper prices. If anything this is reflecting the contrary of what the report is depicting

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Wednesday January 9, 2013 @05:53AM

    Forgive my ignorance, but why would someone selling a property not agree to sell to someone agreeing to purchase for the asking price?
    As someone from overseas thinking about returning to Ireland and investing I'm
    confused.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Wednesday January 2, 2013 @05:39PM

    You are very clever with your wording here, you say "There is now no backlog of Celtic Tiger housing in the capital" but lets not forget Dublin is not the whole of Ireland, in fact it is one of the smallest counties in Ireland so it's no surprise that there is a less of a supply here...

    You also do NOT explain "Demand" You give figures of how long transactions are taking, this is not demand this is just how quickly solicitors and auctioneers get off their arses... the real demand figure is "Transaction volume" therefore please post these figures in table format for the past 10 years if possible....

    Also from your first table we see 20% drops from Jan12 Vs Jan11
    and 10% drops from Dec12 Vs Jan11

    While the percentage drops are showing a decrease, Those are still HUGE percentage drops and for whatever reason seem to always be understated in both your analysis and every other property related analysis.....Sounds to me like someone has a self interest here...

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Kevin Date: Tuesday February 5, 2013 @11:38AM

    It's got nothing to do with the geographical size of Dublin but the population. FYI 1,273,069.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Wednesday January 2, 2013 @07:22PM

    great report guys - comprehensive and informative. just one "typo" which maybe you've already picked up - i think the monaghan arrow on page 5 should be pointing downwards not upwards? no need to post this on website.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Margaret Date: Wednesday January 2, 2013 @09:49PM

    Ronin Lyons and Daft.ie are without doubt the most important voices in the Irish property market.

    Today may not be the end of the property crises but at least it's the beginning of the end.

    There is light at the end of the tunnel at last!

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Thursday January 3, 2013 @04:41AM

    Im confused.....The average 4 bed in limerick 3 months ago was 199,000, and now its 163,000....They say in this report that nationally house prices have dropped by 2.9 p cent.in the last quarter. Im sure in limerick its a little differant from 2.9 p cent in 3 months,but this represents a drop of almost 18p cent in 3 months... Did i get it wrong?.. .Am i missing something here?.Id appreciate someone else s take on this,as i have a house for sale on the ennis road for a while now,and its dropped 36,000 in the last 3 months?

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  • Re: The Daft House Price Report Q4 2012

    Posted By: jim Higgins Date: Thursday January 3, 2013 @11:16AM

    "the Government needs to start planning now for building the new homes the cities will need over the coming decade" That perhaps is the most correct comment in the whole of the report. Will that planning happen , no and the developer/building industry in not there to take the risk in developing those house that are needed ....all this means is the current stock will be around in 5 years time and rents will rocket in Dublin... it will then be a resulting increase in prices and developers /speculators will enter the market with a lag to supply of another 5 years by then prices will have doubled or more.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Thursday January 3, 2013 @12:29PM

    Strange how you came to a conclusion where there may be an under suppy of housing in the near future.Your chart on stock of properties seem to indicate a massive drop on demand while a minor drop in supply since 2008, noting supply already exceeded demand prior to 2008.
    In addition I doubt your data would include the stockpile of properties owned by NAMA nor the thousands of household in mortgage arrears that if not for government intervention would have been repossessed and placed onto the market.
    Until government intervention is stopped, a proper correction will not take place and the financial burden is placed on the declining few to prop up artificial property prices through taxing of those that still have a job. The government intervention also creates a hypocrisy where the working person is contributing to making it harder for himself to own their own property while those that cannot pay to keep their home can continue to keep the property without paying for it. When macro management is like this along with over supply stock and bleak economic forecasts in the EU, I can only conclude the worst is still to come

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Garry Hayes Date: Friday January 4, 2013 @12:22PM

    Your post shows a complete mis understanding of the daft report. No demand figures are in the report , the float of available properties is the in/out of market numbers ...these have shown a steady declince since 2008. Nama have a almost insignificate amount of residentail properties(most of which in any event are unfinished or never to be finished developmemts). Rents continue to climb in Dublin due to lack of supply ... this will continue as no developers/builders willing or able to fund the cost. Rental yields attracts investors and thus prices already are rising. I for instance have bought 38 units in dublin in the last 8 months at yields of 12.5% ..cash is king my friend ... the oppertunities for those with brains to sieze this moment will never arrive again. its like stealing candy from children.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Paul Date: Saturday January 5, 2013 @10:26AM

    Gary, congratulations if you managed to buy 38 properties and get phenomenal yields of over 12%. I have been hunting for over 8 months and not managed to get any seller to agree on the advertised selling price. My criteria for property selection has only been in locations where I hope to get at least a 5% net ROI. Secondly your ability to logistically complete 38 transactions is hard to comprehend given how slow agents and solicitors are if any of us have had experience of investing in Ireland. This is also assuming that the declared seller is smooth sailing where there is no complications with his debt or if it is the bank, their balance sheet. You might like to share your secret

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Elaine Date: Saturday January 5, 2013 @10:32AM

    NAMA owns many finished apartments in the central business district but a lot of unfinished housing projects

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Saturday January 5, 2013 @10:44AM

    Garry, i am sure everyone can see that there is an over supply of properties in Ireland. If rents are truly rising, my guess is due to the switch from mortgage paying to renting. If people no longer are paying their mortgage then they must have added their property to the supply chain

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Sunday January 6, 2013 @12:49PM

    Cash is king def and I would invest now if I could, but only in Dublin.
    The question is who can borrow now? Who will fund 1st time buyer properties in Dublin. There are no jobs. Young Gardai are getting a carrot of 30k (taxable) to clear off for 3 years on a career break. Young teachers cannot get jobs. If they cant borrow who will buy these houses in Dublin?

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Tom Date: Sunday January 6, 2013 @08:37PM

    I see some people again mention "Rents continue to climb in Dublin due to lack of supply". The number of unoccupied apartments in Dublin is the real reason behind the high rental prices. Take a look around Clancy Quay in Islandbridge, or Phoenix Park Racecourse near Castleknock, or The Beacon South Quarter in Sandyford and the number of empty apartments is ridiculous. Releasing all the pent up stock would free up many other properties in the City, then there are all the Houses in Clongriffin, Adamstown, Ballyogan area.

    Also it seems the commuter tap has been switched off entirely? Or ignored.
    There are still people willing to move out of Dublin when there are reasonable transport options.

    Lack of supply is not the problem, the suppy is there but is locked away for some ridiculous reason. More firesales and receiverships are needed, Allsop is the tip of an icecube when it should be an iceberg.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Tuesday January 8, 2013 @06:09AM

    Seems most viewers are expressing symptoms of government intervention to not let the market correct itself. Government is using tax payer money to buy and hide excess supply along with preventing banks from repossessing so as to push up prices. How long can they do this when when increasingly more businesses fail due to high tax and lack of people with spending power due to increasing unemployment. The potential for a collapse in prices seem inevitable when sooner or later the government requires liquidity to resolve its debts.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Terminal 2 Date: Tuesday January 8, 2013 @06:16AM

    3 Metrics:

    Residential Sales ASKING prices over 6 yrs (2006-2012). This ambiguous array is framed by a neat correlation between 2007 average and 2012 average (=100). It serves to suggest a much trumpeted floor has been reached.

    Secondly, Stock (of properties on Daft.ie) and Flow Chart illustrates 6 year 'glut', rather than a price adjustment. It excludes NAMA stock, idle stock, the rest. This does not represent the stock of the available property market. The flow only relates to Daft properties. No price data here, dubious 'volume' metric.

    Thirdly, Nationwide Snapshot of (current?) ASKING prices.

    As information, its poor.

    The Irish property industry cannot be relied on for data. We can however examine the data around the phenomenon: Population, demographics, economy have undergone fundamental changes and these factors are mediating the property market better than any cyclical fantasies. Although a global event has been underway, such upside scenarios inevitably omit global factors and keep it in the parish. Strange, as we are exporters, so know our place in the world, supposedly. Whose takin' the horse to France?

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Derry Scully - Bruce Shaw Date: Thursday January 10, 2013 @11:53AM

    Terminal 2 - Perhaps the greatest analysis on the irish property market - your right the data is soo poor ... localisation and area by area feet on the ground gives you more reliable information . Dublin is better than the country and is moving in the right direction , some counties like cavan , meath , tip etc are down circa 70% since 2008. Dublin family homes in the right area are only down 30% now , will Dublin apartments are down 50 - 60% . Rents are rising in Dubin and so are prices ....by the way i am a buy and have my feet on the ground

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  • Re: The Daft House Price Report Q4 2012

    Posted By: RAYMOND Date: Saturday January 12, 2013 @06:06PM

    Is everyone here on cloud 9. Property prices have at least another 20% to go before things might come back to normal. Ireland has nothing to offer . 30 jobs are created today and 50 jobs are lost tomorrow. Its a joke.
    Why would you buy a house in Ireland now. Heathcare is a joke,Crime is out of control,Gangs run the country and no one seems to care.

    If you are in your 20 or 30 Get out now

    Raymond

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anon Date: Wednesday January 16, 2013 @04:27PM

    Ironically I am considering a return to Ireland after 12 years of life working in the City in London.

    Its difficult to gauge whether that is indeed the right thing to do. One of my key motivations is finding a home for my young family; a 4 bed house (c.2000 sq ft) in a half decent area of London, where the risk of being stabbed or mugged is acceptably low, will set you back at least 1.5m. Prices in London have carried on rising almost regardless of what's going on in the world economy. So the prospect of a similar place with sea views in somewhere like Dalkey for half that price is very appealing. Or am I missing a trick?!

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  • Re: The Daft House Price Report Q4 2012

    Posted By: dannyboy Date: Thursday January 17, 2013 @05:04PM

    I did exactly what you are suggesting nearly 20 years ago. 10 years in the city and back to a more family oriented life in Ireland. It's really a question of where you are likely to be happiest. You must also consider your spouse and children and grandparents. Remember decent schools in London will cost minimum 10k per child per annum. 18 years on I can say I made the right decision, though I am not as rich as my london friends (I should have kept my flat in Battersea). Now is the best time to buy in Dublin. Good luck.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: landlord Date: Tuesday January 15, 2013 @11:14PM

    Okay..I am the one with vested interests! I have ten rented properties. But I realistically reduced the rent on them to slightly below the market average back in 2009. Having done that, I have never had anynofnmynpriperties empty for more than a week. so basically I am not a greedy over charging landlord. And the past few months, alot of tenants have been expecting me to raise the rents as the word is out that rents are rising. back in 2008/2009 it was the same renters who were constantly talking with their friends about falling rents and to go an get a discount form the landlord. I feel the tide has changed again and they are going up. I am not about to raise my rents as good tenants are invaluable but feel I have to point out that from I as a landlord have heard and what my tenants are conveying is that rents are on the way up so those negative comments about rents etc are from people who either have no idea but probably feel negative about life and use this site as a medium to complain.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anon Date: Wednesday January 16, 2013 @01:22PM

    Reasonably good report. However, I am disappointed when I see commentary that draws quantitative comparison in this way with the "Celtic Tiger" years. That period was an outlier, an anomaly, and as such we should get used to ignoring it.

    In comparison to the UK, house prices are still relatively high in Ireland, yet the Irish economy sadly lies in tatters by comparison.

    In the right areas yields may remain reasonable with so many standing away from ownership, but a sustained period of stability in Irish property, other than the occasional blip, personally I believe is many years away....not to mention a period of sustained capital appreciation. One factor which many ignore is the demographics of home ownership in Ireland. An effect yet to be seen is the dying off of the "baby boomer" segment of the population, those now in the age range 55-70, a very important and significant segment of home ownership in Ireland. Whilst I don't consider this will cause a noticable short term impact, it will certainly create a "slow burn" downward drag on any house price trend during a period when we are hoping for a form of recovery.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Mary F Date: Thursday January 24, 2013 @12:37PM

    The Irish Daily Mail released an article 22nd Jan 2013 saying 'every reason to believe a recovery in house prices'. Data from the report :

    More than 4.3 bill E was spent on property last year with an average nationwide price paid of 201,771 euro.

    DNG used figures supplied by the Irish Banking Federation, 47% of all finance used to purchase a home was cash. One in three homes purchased last year were cash-based meaning mortgages were available to 2/3rds of buyers, with finance from AIB and Bank of Ireland funding most. (Buy to let mortgages also being available)

    There is continued progress in the completion of vacant and part complete properties which are down more than 27% since the first National Housing Development survey results in 2010. That's about a 30% drop over just 2 years.

    There are 16,881 properties now vacant, with Letrim recording the highest at 35 per 1000. (or 3.5 %). (there were thousands of properties vacant nationwide even in 2007 - my comment- check government figures on line which are revised regularly).

    Meanwhile the employers group IBEC is is forecasting economic growth of 1.8% this year , higher than government stats, and suggests the domestic market would be further boosted by an increase in public confidence.

    IBEC chief economist Fergal O Brien said there is growing evidence that 2013 could be a turning point for the domestic economy.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Average Joe Date: Wednesday January 16, 2013 @08:50PM

    I read that taking an average rental income of a property annually and multiplying that by between 12 and 15 can give a good idea of a property value.

    I am now looking at a few properties and this seems similar to what the asking prices are.

    Does anyone have an opinion on this method of property valuing?

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Anonymous Poster Date: Thursday January 17, 2013 @09:41AM

    Very Crude validation method.

    Annual Rent divided by the going rental yield will give an approximate value.

    Your multiplying by 12 to 15 is similar to using a rental yield of approx 6.75% - 8.25%.

    The point being if you consider 6.75% - 8.25% to be a good rental yield (which I think many would agree is good in the current low interest rate environment), then your calculation provide a rough guide. However what it ignores is capital depreciation (the value of the property falling further should you wish to sell in the foreseeable future)...likewise capital appreciation. These factors could have a very significant impact bad (or good) on the overall return.

    Also transaction costs and management costs could easily result in at least a 1.00% reduction in the above yields.

    Having said this - I have seen property with much larger implied yields in Ireland, one as high as 18%. Or using your method, the asking prices was a mere mulitple of 6 of the annualised rent.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Terminal 2 Date: Thursday January 17, 2013 @04:39PM

    Anon poster (above) - You've hit the nail on the head by highlighting the wider expense issues firstly, and secondly by saying "However what it ignores is capital depreciation (the value of the property falling further should you wish to sell in the foreseeable future)...likewise capital appreciation. These factors could have a very significant impact bad (or good) on the overall return."

    There is a sporadic ebb and flow of valuation evident in this depressed market within given periods. Asking prices at least give us an indication of what is going on with valuations.

    Without any sale or purchase taking place, property management, either on a small scale, right up to the NAMA book - is concerned with achieving portfolio performance at a given time. The quality and quantity of target performance varies in each case, and is generally dictated by reporting needs, and the wider asset concerns.

    It seems many portfolio properties are on the market purely to meet valuation associated needs. The experience of the poster who described difficulty in having asking price offers accepted, seems to support this. Though one would ask why would one be offering asking prices? That is, unless there is certain (portfolio) value to be realised out of the acquisition-disposal?

    These aspects of property portfolio management are doubtless more substantial, and therefore a lot more visible, in the current property market as adjusts to to wider volatility.

    Valuation performance is certainly creating distortions where general perceptions of value are concerned.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: dannyboy Date: Thursday January 17, 2013 @04:52PM

    In Cork I have no problem renting my properties in city centre or by the university. I held my rents steady last year but this year they will go up. I would add to my portfolio now if I could get cash. But I am entirely realistic. Property is a long term game (buy and hold and pass on to the children). Pay off the loans and collect the cash. Inflation and reversion to the mean are your friends.
    In the meantime we must struggle to stay in the game. I think the figures in the report are realistic the proviso being that there is no sigificant credit available and won't be for 2 to 3 more years.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: Average Joe Date: Thursday January 17, 2013 @07:54PM

    Just to clarify, I am looking to purchase, not to rent but as an owner occupier in south Dublin. I'm not actually fussed about rental yields but as an inexperienced buyer, I need some logic to apply when putting an offer in on a property.

    My above post took the 12 to 15 times rental calculation from Seamus Coffey's The Daft House Price Report Q1 2012:

    "A good guide is that house prices should be somewhere between 12 and 15 times the annual rent that a property can generate. This is a range that should never be ignored but often is. "

    Granted this does not take into account transaction costs, management costs etc. but can anyone else give a reasonable set of rules to give a ballpark? Come on you people, I know there are people out there with more experience than me at this. Throw a dog a bone!!

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  • Re: The Daft House Price Report Q4 2012

    Posted By: dannyboy Date: Friday January 18, 2013 @09:10AM

    Find the right house, with the right garden, on a nice street, facing the right way, with the best view or ambience, near good transport links, away from heavy traffic, close to schools and other amenities, close (or not) to family... etc.. within or close to your budget. Then make an offer. Then negotiate. What I'm sayingy is that everyone will have a different price depending on what they want, what they can afford, what the property is like. It's not an exact science. It is about you want and how keen sellers are.

    As for rental yields ? I paid 600k for a property in 2008. Rent is 30k. So yield is less than 5%. But I got a tracker loan (ecb+0.75% interest only for 25 years). So it works well. Current value is irrelevant. I'm buying for life. It all depends on what you want.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: MaryF Date: Thursday January 24, 2013 @01:03PM

    It's also about what sellers can afford to sell for..the majority of owner occupiers in Ireland have no mortgage, if they want to upsize - then they have to sell at a price which guarantees they can find another property to buy.

    If they have a mortgage and are in negative equity, then they take the burden of the first mortgage with them before the new debt to income ratio is calculated .


    The Daft article suggests that 4 months is a reasonable time to sell a house.

    I spend a lot of time in the UK in the South. The are problems with house prices in the North - but there's been a problem with employment in the North of England for decades; there are mining villages with 2 or more generations who have never worked since the 1980's. Sheffield area - very low house prices but no employment. Average UK prices are not a good guide to compare to Ireland.

    In the South and in outlying regions like Portsmouth it has taken a year or more to find a buyer even in 2006-7. In the New Forest this year, a sought after area to live in, houses which have been on the market for several years have been selling for more than 250k, flats for 200k and retirement flats in seaside locations around Portsmouth for 80 - 120,000.00 Retirement flats for the over 50's being the cheapest available, but generally carry very high maintenance costs.

    The UK does operate a system of partial ownership, when a body like a housing trust builds property and offers it on the basis of 50% to buy 50% to rent. This allows first time buyers an opportunity to get onto the housing ladder with a lower wage ratio needed to purchase. If the Irish banks own a lot of residential property and the Irish government owns the Irish banks, would seem to me to be an answer to some of the remaining over supply.


    When the supply of housing is reduced by the same proportion over the next couple of years it's likely that house prices will return to more normal averages.
    Inflation (using the term against the ever increasing supply of money, not the cost of goods) reduces the value of it in general by at least 50% every 10 years. So effectively the money houses are being valued by today, is optimistically worth half what it was when they were valued in 2002/3. The cost of bread in the shops has almost doubled over period 2005-2012, and although we can buy 'cheap stuff' from China this does little to offset the actual cost of eating and fuel.

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  • Re: The Daft House Price Report Q4 2012

    Posted By: David Date: Monday January 21, 2013 @02:57PM

    The index numbers for residential asking prices are completly different from Q3

    Granted you may have rebased the index, but the percentage change shouldnt change too!

    For instance.
    ..
    The % change between Aug and Sept 2012 in the Q3 report is

    45.4/46.0 -1 = -1.3%

    but no the % change in Q4 report is

    97.1/99.0 - 1 = -1.9%!

    Whats going on here. The whole index appears to have changed! Is this a revision to the methodology or a mistake??

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