Housing Bubble Bursting

Zynks

OMD wrote: »

If you take average industrial wage (as distinct from average wage) at €36,000 that means based on the last 40 years, house price should settle somewhere between 4 and 5 times this or €144,000 to €180,000. Using the latest CSO data average prices are now about €178,000 according to Goodbody Stockbrokers
http://www.independent.ie/national-news/surprise-rise-in-house-prices-sign-of-capital-bottoming-out-2803480.html

First of all, I am not trying to argue on the likelihood of where prices are heading to, but on the validity of "average" prices compared to average wages as a reference for where prices are likely to go.

I can understand what an average wage is and how it is calculated, but what is an average house? Up to the early 90's apartments barely existed, for instance, while today they are a significant part of the property stock.

As we know apartments have dropped more than houses, and they are smaller in sqf than houses. So what is an average property and how do we factor in the changes in size, land, and geographic location over the years?

Overall, prices vs wages is highly simplistic. It does not consider availability (or lack) of funding in the market, prevailing cost of money, supply and demand and demographic characteristics of the market. Most of these would point towards a drop in value, which may have already occurred, or may be just starting - but not all of them.

However, none of these factors have any relevance until there is a reduction in the volume of distressed properties (private, repossessed or NAMAised) and availability of credit returns. Neither of these is likely to occur in the near to medium term, so no point trying to talk common sense at the moment. This is a market of mostly distressed sellers and very few buyers sitting on cash.

Yahew

Yes, all of that is true. However if there is a disconnect between wages and prices on the flip side - as there was in the 90's - that is a good time to buy long term.

unless you think the economy will never recover.

Yahew

Yahew wrote: »

unless you think the economy will never recover.

This!

The global rules have changed over the last decade. Globalisation has ensured that average wages are equalising around the planet, limits on resources will ensure that all resources , e.g. oil, copper etc. will become relatively more expensive along with food.

All of these increases will mean less disposable income which in turn will mean less spending all round, less spending means of course a weaker economy and lower house prices.

We are entering the "new normal".

Yahew

dolanbaker wrote: »

Yahew wrote: »

unless you think the economy will never recover.

This!

The global rules have changed over the last decade. Globalisation has ensured that average wages are equalising around the planet, limits on resources will ensure that all resources , e.g. oil, copper etc. will become relatively more expensive along with food.

All of these increases will mean less disposable income which in turn will mean less spending all round, less spending means of course a weaker economy and lower house prices.

We are entering the "new normal".

I was not actually suggesting it will never recover.

Yahew

Yahew wrote: »

I was not actually suggesting it will never recover.

I know, but I am!

To clarify, the economy of the early "noughties" was a bit of a fairytale it could never had continued without infinite resources and growth!

The obsession with growth is what got us into this mess in the first place.

Unrealistic

Spiritofthekop wrote: »

What Daft.ie???..fair enough then.

I like to listen to people in the know & people who are actually affected by it, not Daft.ie who are well known to have 100's idle overpriced/rently properties sitting empty on their site for months/years which dictate their stats.

That's not actually true. The only listings that contribute to the stats for a specific quarter are new listings for that quarter. A house listed in February 2009, for example, was included in the analysis for Q1 2009 but it does not impact any subsequent quarterly calculations even if it is still listed. The methodology used is explained in detail by Ronan Lyons on his own blog and in his posts on www.thepropertypin.com.

leds

I think house prices are becomming more realisitic. I still feel that the prices will drop further. But I think there is better value out there and that in two years it is likely prices will have dropped further.

I am thinking that in two years would be a good time to consider looking at buying.

From my experience of dealing with Banks it appears they are reluctant to offer loans (my experience being trying to apply for business loans on behalf of small companies).

With interest rates rising and and people losing jobs etc just wondering if people with Banking knowledge know the level of Mortgages being granted.

Treehouse72

leds wrote: »

With interest rates rising and and people losing jobs etc just wondering if people with Banking knowledge know the level of Mortgages being granted.

A report from last week:

MORTGAGE lending has fallen to its lowest level in 40 years. Experts expect just 11,000 new mortgage loans to be approved this year -- the lowest level of lending since 1971.
....

Mortgage lending is also 93pc lower than it was in 2006...

http://www.independent.ie/business/personal-finance/property-mortgages/mortgage-lending-drops-to-lowest-level-since-1971-2802386.html


It is staggering: 93% fewer mortgages being arranged in Q1 '11 v. Q1 '06. That is such an extreme change that I honestly struggle to get my head around it.

niallers1

I wonder what the percentage would be if they gave a mortgage to everybody that applied..probably not much different.


Are many people applying for mortgages these days.. I'd say not..

Is there pent up demand there for housing, I'd say so..It will be interesting to see the figures when the banks start lending again..

leds

Thanks Treehouse for that.

At Niallers

I work in an Accounting practice and we sometimes assist clients apply for business loans and residential mortgages for our clients.

In the past three months only two mortgage applications have been made by us assisting our clients, both applying for less than 150k each.

Neither Mortgage has been approved.

I have found that Banks are increasingly reluctant to consider anybody for a mortgage unless they are in a capable position of repaying the loan. proof that shows they are in receipt of steady income, have collateral, guarantor etc.

All of these factors are telling me that only individuals with years of good credit history, sufficient deposit, collateral and reasonably safe job are only being considered.

I feel there are a number of cash buyers just biding there time because who in this climate would like to take out a mortgage if their job could be gone tomorrow.

jmayo

niallers1 wrote: »

It's not what people say it's the way they think and act..If they think their property will bounce back in value then they will not sell to you for the price of a mars bar no matter how much you want them too..

True people would do that.
But why do I think you actually think property will as you term it "bounce back in value" ?

They will not make their paper loss into a real loss unless they really have no option..as long as they can pay the mortgage then there will be no fire sale apart from the nama property out in the middle of nowhere without amenities and public transport.

You see there again you are looking at the rosey side of this situation, that is that most of the NAMA or other unsold half built property is out in the ar**hole of nowhere.
Well it is most definetly not.
Ever read of a place called Sandyford, South County Dublin.
It is on Luas link, as good as on M50 motorway and there are apartment blocks half built and they were trying to flock off finished apartments a year or so back.
Tallaght is near motorway/Luas and I would say there is glut of property there.

OMD wrote: »

I agree about the credit shortage and that will obviously depress prices but, in the medium term, if we consider where are prices going to settle? Well we don't seem to be too far off the historical average price (in relation to incomes).

Do you knock what happens after a massive bubble ?
Prices usually go lower than what they were at start of bubble.
I would reckon we could have prices back to mid to late 90s.
So how would that work out relating to your average.

niallers1 wrote: »

...
Is there pent up demand there for housing, I'd say so..It will be interesting to see the figures when the banks start lending again..

Take a look at the Irish banking system.
There is no longer an INBS or EBS dishing out mortgages to homebuyers.
Two of our indigenous dedicated home mortgage providers have gone.
Halifax/Bank of Scotland have exited the market.
ACC/Rabobank and NIB are constrained by their parent institutions.

There is no longer an Anglo dishing out commerical property loans.
The other three lending providers (BOI, AIB and PTSB) are severily constrained so don't expect one day there will be mortgages\property lending flying around like the old days.

Caoimhín

jmayo wrote: »

The other three lending providers (BOI, AIB and PTSB) are severily constrained so don't expect one day there will be mortgages\property lending flying around like the old days.

My father worked in AIB for 40 odd years. He assures me that the banks lending practices are simply returning to normal, the crazy lending practices over the last 12 or so years were abnormal.

OMD

jmayo wrote: »

Do you knock what happens after a massive bubble ?
Prices usually go lower than what they were at start of bubble.
I would reckon we could have prices back to mid to late 90s.
So how would that work out relating to your average.

4-5 times average industrial wage. I did post the figures. From the figures it seems since the early 70s at least prices have never been at 3 times average industrial wage (despite what people keep saying). I should also point out that in the 70s aveage income and average industrial wage were more or less the same thing. Now average incomes are much higher. Also household income is substantially higher. Add to all that, despite rising taxes at present we still take home a greater % of our earnings than we did 30 years ago

jmayo wrote: »

There is no longer an Anglo dishing out commerical property loans.
The other three lending providers (BOI, AIB and PTSB) are severily constrained so don't expect one day there will be mortgages\property lending flying around like the old days.

Loans are getting as hard to get as they were in the 70s & 80s. Then you needed a proven record of savings, a deposit of 10-20%, a good reasonably permanent job and an ability to repay the loan.

Dades

I'm in the middle of the mortgage approval process and according to my broker - it's all about what you can repay.

LTV doesn't really count for much anymore because what the banks want is to know if you can afford the (stress-tested) repayments.
Apparently banks will give 90%+ mortgages so long as the borrower can show they will have no problem repaying their monthly.

That said, I haven't got word yet from my bank due to a backlog, of all things.

Treehouse72

OMD wrote: »

I got the link to this from the property pin. No one really criticised it so I presume is is reasonably accurate. It compares average house price to average wage for each year. The guy who posted it said "the figures for 1986 to 1990 are a bit out, as I couldn’t get average industrial wage figures for those years and had to use 1985 and 1991 figures instead".

I find it interesting for a number of reasons. Firstly it shows that over the last 40 years house prices in Ireland have averaged a bit over 5 times average income, have hardly ever gone below 4 times average income and never reached the fabled 3 times average income that is spoken about so often.

1973 avnhp: €9,009.00 , avindw: €1,599.9 , ratio: 5.631
1974 avnhp: €10,836.00 , avindw: €1,950.4 , ratio: 5.556
1975 avnhp: €13,254.00 , avindw: €2,520.7 , ratio: 5.258
1976 avnhp: €15,564.00 , avindw: €2,921.5 , ratio: 5.327
1977 avnhp: €18,754.00 , avindw: €3,385.0 , ratio: 5.540
1978 avnhp: €24,082.00 , avindw: €3,937.2 , ratio: 6.117
1979 avnhp: €29,387.00 , avindw: €4,624.2 , ratio: 6.355
1980 avnhp: €34,967.00 , avindw: €5,506.3 , ratio: 6.350
1981 avnhp: €40,167.00 , avindw: €6,387.7 , ratio: 6.288
1982 avnhp: €44,060.00 , avindw: €7,326.9 , ratio: 6.013
1983 avnhp: €44,448.00 , avindw: €8,286.2 , ratio: 5.364
1984 avnhp: €45,419.00 , avindw: €9,261.5 , ratio: 4.904
1985 avnhp: €46,542.00 , avindw: €10,048.1 , ratio: 4.632
1986 avnhp: €48,256.00 , avindw: €10,048.1 , ratio: 4.803 **
1987 avnhp: €48,151.00 , avindw: €10,048.1 , ratio: 4.792 **
1988 avnhp: €52,450.00 , avindw: €13,707.5 , ratio: 3.826 **
1989 avnhp: €58,178.00 , avindw: €17,293.7 , ratio: 3.364 **
1990 avnhp: €65,541.00 , avindw: €17,293.7 , ratio: 3.790 **
1991 avnhp: €66,914.00 , avindw: €17,293.7 , ratio: 3.869
1992 avnhp: €69,264.00 , avindw: €18,183.7 , ratio: 3.809
1993 avnhp: €69,883.00 , avindw: €18,841.7 , ratio: 3.709
1994 avnhp: €72,732.00 , avindw: €19,481.6 , ratio: 3.733
1995 avnhp: €77,994.00 , avindw: €19,879.2 , ratio: 3.923
1996 avnhp: €87,202.00 , avindw: €20,692.2 , ratio: 4.214
1997 avnhp: €102,222.00 , avindw: €21,377.6 , ratio: 4.782
1998 avnhp: €125,302.00 , avindw: €22,868.6 , ratio: 5.479
1999 avnhp: €148,521.00 , avindw: €24,165.5 , ratio: 6.146
2000 avnhp: €169,191.00 , avindw: €25,786.0 , ratio: 6.561
2001 avnhp: €182,863.00 , avindw: €27,919.0 , ratio: 6.550
2002 avnhp: €198,087.00 , avindw: €29,872.1 , ratio: 6.631
2003 avnhp: €224,567.00 , avindw: €31,513.5 , ratio: 7.126
2004 avnhp: €249,191.00 , avindw: €33,338.3 , ratio: 7.475
2005 avnhp: €276,221.00 , avindw: €35,277.5 , ratio: 7.830
2006 avnhp: €305,637.00 , avindw: €37,477.1 , ratio: 8.155

If you take average industrial wage (as distinct from average wage) at €36,000 that means based on the last 40 years, house price should settle somewhere between 4 and 5 times this or €144,000 to €180,000. Using the latest CSO data average prices are now about €178,000 according to Goodbody Stockbrokers
http://www.independent.ie/national-news/surprise-rise-in-house-prices-sign-of-capital-bottoming-out-2803480.html

Very interesting statistics. I did not know that 3x had never been reached before.

But I would just make the quick point that as much as 33% of that table may be redundant: 1996 - 2006. We should simply remove this entire period from the equation because we know it was nutso time. That might well increase the average multiple, but I think in all honesty none of that period is safe to draw conclusions from.

I had a quick look for UK multiples over time (I typed "Historical income multiples for mortgage UK" into Google and these are the relevant results - I'm not cherry picking or selectively quoting. I only selected mainstream/respected sources). Most suggest 4x is high.

Generally speaking, a mortgage lender will lend you between three and four times your gross salary, although some lenders will offer you more if you're willing to pay a higher interest rate.

http://www.fool.co.uk/mortgages/information/how-much-can-you-borrow.aspx

One only has to look at Nationwide's data on UK house prices to see that the ratio of prices to first-time buyers incomes is 4.3, higher than it was at any point between 1983 and 2003.

http://www.economist.com/blogs/buttonwood/2011/06/housing-and-lending-practices

One particularly worrying trend is the continuing rise in loans at high income multiples, by which I mean above 3 for a single person or 2 for joint borrowers.

http://www.fsa.gov.uk/Pages/Library/Communication/PR/2000/150.shtml

First-time buyers typically borrowed 2.95 times their income, down from three times in January...Loans to home movers were 2.65x.

http://www.cml.org.uk/cml/media/press/2218

Seems to me 3-4x is by no means conservative in historical UK terms. I think it might be possible to draw the conclusion that Ireland was always a bloody basket case.

Whatever conclusions we might draw from all that I don't think it's conceivable that above 4x will be the norm in Ireland over the next 10 or 15 years.

The problem with those stats as I've already pointed out, is the fact that it's average industrial wages verses ALL house types!

An industrial pipe fitter is not going to be in the market for a trophy house in Blackrock! :pac:

OMD

Deleted User wrote: »

The problem with those stats as I've already pointed out, is the fact that it's average industrial wages verses ALL house types!

An industrial pipe fitter is not going to be in the market for a trophy house in Blackrock! :pac:

It is statistics over nearly 40 years. It compares year to year over that period. The odd trophy home will not effect the figures. If there are enough "trophy homes" to affect figures then they are a valid part of the housing market

OMD

Treehouse72 wrote: »

Very interesting statistics. I did not know that 3x had never been reached before.

But I would just make the quick point that as much as 33% of that table may be redundant: 1996 - 2006. We should simply remove this entire period from the equation because we know it was nutso time. That might well increase the average multiple, but I think in all honesty none of that period is safe to draw conclusions from.

I was been conservative when I said prices were 4-5 times income. If you take the figures from 1973 to 1993 average pice is just over 5 times income

Treehouse72 wrote: »

I had a quick look for UK multiples over time (I typed "Historical income multiples for mortgage UK" into Google and these are the relevant results - I'm not cherry picking or selectively quoting. I only selected mainstream/respected sources). Most suggest 4x is high.

http://www.fool.co.uk/mortgages/information/how-much-can-you-borrow.aspx

http://www.economist.com/blogs/buttonwood/2011/06/housing-and-lending-practices

http://www.fsa.gov.uk/Pages/Library/Communication/PR/2000/150.shtml

http://www.cml.org.uk/cml/media/press/2218

Seems to me 3-4x is by no means conservative in historical UK terms. I think it might be possible to draw the conclusion that Ireland was always a bloody basket case.

Whatever conclusions we might draw from all that I don't think it's conceivable that above 4x will be the norm in Ireland over the next 10 or 15 years.

You are basing your figures on the first time buyers market which will be lower than the average. Also you are basing it on the amount people borrow, which is almost by definition, less than the house price. To make it easier I looked up average UK wage and got http://www.statistics.gov.uk/cci/nugget.asp?id=285

"Results from the 2010 ASHE (Annual Survey of Hours and Earnings) show that median weekly pay for full-time employees in the UK grew by 2.1 per cent in the year to April 2010, to reach £499. Median earnings of full-time male employees were £538 per week in April 2010; for women the median was £439."

So average UK wage is £26,000 (give or take)

Then looking up average UK house price
http://news.bbc.co.uk/2/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm

Average UK house price is £232,628. So average house is 9 times average wage. The long term UK average is a bit above 4 times average wage

OMD

OMD wrote: »

It is statistics over nearly 40 years. It compares year to year over that period. The odd trophy home will not effect the figures. If there are enough "trophy homes" to affect figures then they are a valid part of the housing market

Yes, but it is still ALL house types verses ONE income group.

Edit: those UK figures are skewed by the London effect, many houses in London are simply out of reach of the the average person.

Here are some more realistic regional figures, by house type. (from the same BBC page)

Northampton
Average house price
£157,926

House type Average price
Detached £240,117
Semi-detached £145,724
Terrace £124,977
Flat £88,420

Assuming an average wage of £26k then a typical house (terrace or semi detached) is five times income (single wage earner)

Mr. Presentable

We are not in the UK. Nor are we in the USA, or Japan.

There is no point in offering figures from these as relevant to Ireland

Bobeagleburger

I think if house prices keep falling which I think they will, there will be some smart buyers able to buy houses with little or no mortgage in 3/4 years.

Mr. Presentable

Mr. Presentable wrote: »

We are not in the UK. Nor are we in the USA, or Japan.

There is no point in offering figures from these as relevant to Ireland

In a sane world the global house prices are determined by what the banks lend, based on ability to repay with minimal risk of the mortgagee defaulting.

That's why 3-4 times annual income is an important yardstick.

In many parts of the world it may only buy a tin shack.

Bobeagleburger

those stays are worth SFA as the country has never had a banking crisis like this

OMD

Deleted User wrote: »

Yes, but it is still ALL house types verses ONE income group.

But it is comparing the same thing over a prolonged period so that doesn't matter unless you feel quantity of "trophy homes" has changed significantly over that time. You can use average wage (as distinct from average industrial wage)to average price if you want. It will give different figures but the same trend and will still show we are now just about back at long term average prices. This doesn't mean prices cannot fall any more. I certainly think they will but it does mean this may be close to the figure they will settle at over the next few years

Deleted User wrote: »

Edit: those UK figures are skewed by the London effect, many houses in London are simply out of reach of the the average person.

Here are some more realistic regional figures, by house type. (from the same BBC page)



Assuming an average wage of £26k then a typical house (terrace or semi detached) is five times income (single wage earner)

But average wages in Northampton are significantly lower than the national average. London wages skew the figures as much as London house prices. For your info house prices in Nothampton are slightly over 7 times Northampton income. You are looking to skew the figures yourself by selectively picking even your Northampton figures leaving out flats & detached homes. Average wages to average price is a fair way to look at things. As would median wage to median price but median wage to average price or average wage to median price is not a reasonable way to look at things

Monty Burnz

OMD wrote: »

For your info house prices in Nothampton are slightly over 7 times Northampton income. You are looking to skew the figures yourself by selectively picking even your Northampton figures leaving out flats & detached homes. Average wages to average price is a fair way to look at things. As would median wage to median price but median wage to average price or average wage to median price is not a reasonable way to look at things

It does look like the UK is still cruising for a big crash, unless they continue to inflate away their debt somehow.

Monty Burnz

Monty Burnz wrote: »

It does look like the UK is still cruising for a big crash, unless they continue to inflate away their debt somehow.

The only thing that has prevented a (nationwide) UK crash so far is the limitation on supply, in places where there is an oversupply prices are already crashing.

From the BBC site

Blaenau Gwent

Average house price
£80,623

Detached £143,538
Semi-detached £88,260
Terrace £66,429
Flat £42,750

Annual change in house price
-12.5%
Quarterly change
-10.5%

A typical house can be got for 3-4 times income without any difficulty.

jmayo

Caoimhín wrote: »

My father worked in AIB for 40 odd years. He assures me that the banks lending practices are simply returning to normal, the crazy lending practices over the last 12 or so years were abnormal.

Sorry this was my point, sorry if it was phrased badly by saying the old days by which I meant the bubble years.

OMD wrote: »

4-5 times average industrial wage. I did post the figures. From the figures it seems since the early 70s at least prices have never been at 3 times average industrial wage (despite what people keep saying). I should also point out that in the 70s aveage income and average industrial wage were more or less the same thing. Now average incomes are much higher. Also household income is substantially higher. Add to all that, despite rising taxes at present we still take home a greater % of our earnings than we did 30 years ago

Maybe that was because back in the 80s we had tax rates of 60 plus percent.
The 3 to 4 times average industrial wage is a yardstick not a rule.
I think anything above 4.5 or most definitely 5 is overpriced.
We were heading towards 8 and 9 at one point.

During the last 15 odd years it became increasingly difficult for single income people to afford a house.
That shows the way the prices have changed.

Also looking at some of the figure posted earlier, I have issues with some of the average industrial wages.

1990 avnhp: €65,541.00 , avindw: €17,293.7 , ratio: 3.790 **
1991 avnhp: €66,914.00 , avindw: €17,293.7 , ratio: 3.869

For a start I don't believe the average industrial wage was this high in those years.
These were salaries given to newly degree qualified engineers in those years and after 4 years of college I would hope they would start on more than average industrial wage.

OMD wrote: »

Loans are getting as hard to get as they were in the 70s & 80s. Then you needed a proven record of savings, a deposit of 10-20%, a good reasonably permanent job and an ability to repay the loan.

And that is what is normal.

Mr. Presentable wrote: »

We are not in the UK. Nor are we in the USA, or Japan.

There is no point in offering figures from these as relevant to Ireland

As the bulls used to tell us "we are different".

About the only they got right, but sadly in the wrong context as they used to also state that "we do not have a bubble and we will have a soft landing". :rolleyes:

OMD

jmayo wrote: »

Also looking at some of the figure posted earlier, I have issues with some of the average industrial wages.

For a start I don't believe the average industrial wage was this high in those years.
These were salaries given to newly degree qualified engineers in those years and after 4 years of college I would hope they would start on more than average industrial wage.
:rolleyes:

You may well be right. As I said these are not my figures and I did already say the 1990 figure is wrong (hence the **). Remember though these are Euro figures and you were obviously paid in pounds. If you are right and wages in this period were substantially lower, that means house prices in Ireland since the 1960s have never been below 4 times income. So either property has been over valued for almost 40 years or else you have to abondon the 3-4 times average industrial wage as any kind of "yardstick"

MarchDub

OMD wrote: »

I got the link to this from the property pin. No one really criticised it so I presume is is reasonably accurate. It compares average house price to average wage for each year. The guy who posted it said "the figures for 1986 to 1990 are a bit out, as I couldn’t get average industrial wage figures for those years and had to use 1985 and 1991 figures instead".

I find it interesting for a number of reasons. Firstly it shows that over the last 40 years house prices in Ireland have averaged a bit over 5 times average income, have hardly ever gone below 4 times average income and never reached the fabled 3 times average income that is spoken about so often.

1973 avnhp: €9,009.00 , avindw: €1,599.9 , ratio: 5.631
1974 avnhp: €10,836.00 , avindw: €1,950.4 , ratio: 5.556
1975 avnhp: €13,254.00 , avindw: €2,520.7 , ratio: 5.258
1976 avnhp: €15,564.00 , avindw: €2,921.5 , ratio: 5.327
1977 avnhp: €18,754.00 , avindw: €3,385.0 , ratio: 5.540
1978 avnhp: €24,082.00 , avindw: €3,937.2 , ratio: 6.117
1979 avnhp: €29,387.00 , avindw: €4,624.2 , ratio: 6.355
1980 avnhp: €34,967.00 , avindw: €5,506.3 , ratio: 6.350
1981 avnhp: €40,167.00 , avindw: €6,387.7 , ratio: 6.288
1982 avnhp: €44,060.00 , avindw: €7,326.9 , ratio: 6.013
1983 avnhp: €44,448.00 , avindw: €8,286.2 , ratio: 5.364
1984 avnhp: €45,419.00 , avindw: €9,261.5 , ratio: 4.904
1985 avnhp: €46,542.00 , avindw: €10,048.1 , ratio: 4.632
1986 avnhp: €48,256.00 , avindw: €10,048.1 , ratio: 4.803 **
1987 avnhp: €48,151.00 , avindw: €10,048.1 , ratio: 4.792 **
1988 avnhp: €52,450.00 , avindw: €13,707.5 , ratio: 3.826 **
1989 avnhp: €58,178.00 , avindw: €17,293.7 , ratio: 3.364 **
1990 avnhp: €65,541.00 , avindw: €17,293.7 , ratio: 3.790 **
1991 avnhp: €66,914.00 , avindw: €17,293.7 , ratio: 3.869
1992 avnhp: €69,264.00 , avindw: €18,183.7 , ratio: 3.809
1993 avnhp: €69,883.00 , avindw: €18,841.7 , ratio: 3.709
1994 avnhp: €72,732.00 , avindw: €19,481.6 , ratio: 3.733
1995 avnhp: €77,994.00 , avindw: €19,879.2 , ratio: 3.923
1996 avnhp: €87,202.00 , avindw: €20,692.2 , ratio: 4.214
1997 avnhp: €102,222.00 , avindw: €21,377.6 , ratio: 4.782
1998 avnhp: €125,302.00 , avindw: €22,868.6 , ratio: 5.479
1999 avnhp: €148,521.00 , avindw: €24,165.5 , ratio: 6.146
2000 avnhp: €169,191.00 , avindw: €25,786.0 , ratio: 6.561
2001 avnhp: €182,863.00 , avindw: €27,919.0 , ratio: 6.550
2002 avnhp: €198,087.00 , avindw: €29,872.1 , ratio: 6.631
2003 avnhp: €224,567.00 , avindw: €31,513.5 , ratio: 7.126
2004 avnhp: €249,191.00 , avindw: €33,338.3 , ratio: 7.475
2005 avnhp: €276,221.00 , avindw: €35,277.5 , ratio: 7.830
2006 avnhp: €305,637.00 , avindw: €37,477.1 , ratio: 8.155

If you take average industrial wage (as distinct from average wage) at €36,000 that means based on the last 40 years, house price should settle somewhere between 4 and 5 times this or €144,000 to €180,000. Using the latest CSO data average prices are now about €178,000 according to Goodbody Stockbrokers
http://www.independent.ie/national-news/surprise-rise-in-house-prices-sign-of-capital-bottoming-out-2803480.html

Speaking as someone who was around in 1973 the figures for the early and mid seventies are way off anyway. In 1973 you could buy a new 3 bed semi for around 4,000 pounds in Dublin - and this was when central heating and fitted kitchens were included - something that older houses lacked at the time. Older homes went for less.



London prices were around 3 times that of Dublin.

OMD

MarchDub wrote: »

Speaking as someone who was around in 1973 the figures for the early and mid seventies are way off anyway. In 1973 you could buy a new 3 bed semi for around 4,000 pounds in Dublin - and this was when central heating and fitted kitchens were included - something that older houses lacked at the time. Older homes went for less.



London prices were around 3 times that of Dublin.

You may well have been able to get a house for that but we are talking average prices. According to the CSO average price in the country in 1973 was €9,009. Interestingly average interest rate was 10% so as a % of take home pay they were a hell of a lot more expensive then than now.
http://eumatters.ie/getmedia/a6fbe03e-a168-4ac7-a6f9-f0903845761f/CSO-Ireland-and-EU-Doc.aspx

Although further down you can see wages in 1973 were higher than I quoted previously. They were €1,991 so prices in 1973 were 4.5 times average wage