Property Market 2015

slowjoe17

alastair wrote: »

The problem is, it's no evidence of anything that impacts on the price index. See icecream analogy. Massive sales in August don't make for inflation in icecream value.

Icecream is a commodity where production can easily be increased.

Housing has an almost fixed supply.

Massive increase in sales in housing DO in fact, make for inflation of house price value.

You own example works against your argument.

Greyian

alastair wrote: »

The problem is, it's no evidence of anything that impacts on the price index. See icecream analogy. Massive sales in August don't make for inflation in icecream value.

It's already been explained, those aren't total values, they are average values. So the average price achieved in August was higher than any other month.

alastair

slowjoe17 wrote: »

You certainty is clearly wrong. There is a definite possibility of a crash.

Rising prices generates demand in a housing market. People worry about never being able to buy if prices rise too far. In a falling market, that demand doesn't exist, unless lack of information misleads people. The PPR means that much more information is available now than in the past.

Because rising prices generate support, a flat market is essentially impossible. Look into your crystal ball and call "boom" or "bust". "Holds steady" isn't economically possible.

You must have missed the post where I predicted slow growth in prices. A crash, is of course, possible, but then so is an asteroid impact, or lots of unlikely events. Do I expect either in the next 5-10 years? Nope.

alastair

Greyian wrote: »

It's already been explained, those aren't total values, they are average values. So the average price achieved in August was higher than any other month.

I don't need the bleeding obvious 'explained' cheers. It's an average of a random selection of properties with no attempt to apply a price index to similar properties. That's to say, the variance from month to month in the PPR tells us very little about whether property values are rising or falling.

It could well be the monthly average of oranges compared to the monthly average of apples.

alastair

slowjoe17 wrote: »

Icecream is a commodity where production can easily be increased.

Housing has an almost fixed supply.

Massive increase in sales in housing DO in fact, make for inflation of house price value.

You own example works against your argument.

Massive increase in house sales can either influence prices up or down, so I'm not sure where that takes you.

Increased supply (and indeed, sales) have demonstrably run parallel to slight price falls in Dublin, and it would be foolish to dismiss the probability of cause and effect there.

The icecream analogy doesn't pretend to equate lollies to houses. It's supposed to highlight the fact that the PPR data is not a price index, and that peaks in monthly PPR price averages are not an indicator of property prices rising or falling. It's just a random snapshot of what's happening that month - in isolation. Icecream sales data for July tells us nothing about the commodity value of that icecream.

Barely Hedged

audi12 wrote: »

False price rise on the back of homes shortage how about that for a start

If thats just the start, tell me more.

audi12 wrote: »

inflated prices that are not real once housing supply catches up a lot of average older stock will be left over that no one wants

"Inflated prices". Can you point to a period or index that you consider to be non-inflated prices?

Can you also define numerically the percentage decrease thats defines a crash?

alastair

audi12 wrote: »

There is always an end there is no difference between the two

The January Sales must be a scary time for you, if that's your belief.

Price drops are no more a crash, than price rises are a bubble.

Given that property prices are, over the historic long term, pretty much always rising, I guess we've been subject to a centuries old property bubble?

Barely Hedged

alastair wrote: »

Massive increase in house sales can either influence prices up or down, so I'm not sure where that takes you.

Increased supply (and indeed, sales) have demonstrably run parallel to slight price falls in Dublin, and it would be foolish to dismiss the probability of cause and effect there.

The icecream analogy doesn't pretend to equate lollies to houses. It's supposed to highlight the fact that the PPR data is not a price index, and that peaks in monthly PPR price averages are not an indicator of property prices rising or falling. It's just a random snapshot of what's happening that month - in isolation. Icecream sales data for July tells us nothing about the commodity value of that icecream.

<MOD SNIP>

The PPR is only of use for measuring street level or very specific area trends. The CSO is useful for government planning and proper national and regional house price analysis as its demonstrates a correlation with economic indicators. Its a simple as that.

gaius c

alastair wrote: »

The problem is, it's no evidence of anything that impacts on the price index. See icecream analogy. Massive sales in August don't make for inflation in icecream value.

You've already been told why your ice cream analogy is flawed. The trend above shows prices, not volume.
Besides there isn't all that much of a relationship between house prices and transaction volume right now. 2015 has seen plenty of transactions but at significantly lower price points than 2014.

This is all coming from your erroneous belief that the new CB rules (announced end September) caused the current slowdown and your refusal to consider evidence demonstrating that it isn't true. The new rules will probably impact prices but the current phoney war actually started last summer when prices raced past the ability (or willingness) of the market to pay.

gaius c

Barely Hedged wrote: »

Pull down your zipper, face the direction of the wind and let rip because thats all your doing.

Youre wasting your time explaining the glaringly obvious differences between a price measure and an index to these people.

The PPR is only of use for measuring street level or very specific area trends. The CSO is useful for government planning and proper national and regional house price analysis as its demonstrates a correlation with economic indicators. Its a simple as that.

Any index that excludes half it's possible data points cannot by definition be definitive.

tharmor

Will Greece exit have any impact on property prices in Ireland ?

gaius c

tharmor wrote: »

Will Greece exit have any impact on property prices in Ireland ?

Been asked a few pages back I think.

Difficult to say would be my definitive answer.

audi12

gaius c wrote: »

You've already been told why your ice cream analogy is flawed. The trend above shows prices, not volume.
Besides there isn't all that much of a relationship between house prices and transaction volume right now. 2015 has seen plenty of transactions but at significantly lower price points than 2014.

This is all coming from your erroneous belief that the new CB rules (announced end September) caused the current slowdown and your refusal to consider evidence demonstrating that it isn't true. The new rules will probably impact prices but the current phoney war actually started last summer when prices raced past the ability (or willingness) of the market to pay.

prices have never recovered in major towns in smaller counties like mayo EA are full of crap making it seem as if prices are recovering everywhere ...

alastair

gaius c wrote: »

You've already been told why your ice cream analogy is flawed. The trend above shows prices, not volume.

Once again, the analogy is not about volume, but of the nature of the snapshot of sales. Lots of icecream sells in July - the average price icecream may peak in that month, because fancy pants Murphy's and Mr. Whippy vans do a lot of business. Come February, it's probably more supermarket tubs of Haagan Daaz and Vienettas. Does the peak July stat tell us anything about the price index of icecream? No it doesn't, because it doesn't pretend to equate any price index significance onto two values which may have little meaningful in common. All it takes is a couple of mansions, or a run of apartment sales to skew the average in any month. That's precisely why the PPR caution you not to use the stats as a price index - it isn't one.

gaius c wrote: »

Besides there isn't all that much of a relationship between house prices and transaction volume right now. 2015 has seen plenty of transactions but at significantly lower price points than 2014.

Prices are lower, or at least partially, because of increased volume/supply. As I've already pointed out.

gaius c wrote: »

This is all coming from your erroneous belief that the new CB rules (announced end September) caused the current slowdown and your refusal to consider evidence demonstrating that it isn't true. The new rules will probably impact prices but the current phoney war actually started last summer when prices raced past the ability (or willingness) of the market to pay.

You seem to have difficulty following my points. The change in central bank rules prompted an increase in property sales and selling prices, because it made the need to buy for some (those with 10% deposit mortgage approval) that more urgent. The subsequent drop in prices in Dublin is down to the factors I've already identified. The 'phoney war' as you call it was the consequence of limited supply meeting motivated buyers, or bog-standard market forces at play.

alastair

gaius c wrote: »

Any index that excludes half it's possible data points cannot by definition be definitive.

It's the authoritive source on the subject, which makes it definitive. Bottom line is that it's the only property price index we have, which makes it the best.

audi12

alastair wrote: »

It's the authoritive source on the subject, which makes it definitive. Bottom line is that it's the only property price index we have, which makes it the best.

One thing is for certain we will never give up out interest in property in this country not as long as the sun rises in the morning

gaius c

Your ice cream stuff is the same sort of tautology as intelligent design is to evolution. It's for obfuscation, deflection and evasion not illumination.

Prices are lower, or at least partially, because of increased volume/supply. As I've already pointed out.

You're spoofing here. There's no real correlation between the number of transactions and prices. I'll post the raw data for you in the next post and you're welcome to have a go at trying to.

The change in central bank rules prompted an increase in property sales and selling prices, because it made the need to buy for some (those with 10% deposit mortgage approval) that more urgent

What increase in selling prices? Both CSO and PPR show a significant drop off in increases by the end of 2014.

gaius c

Transactions by month



Transactions by quarter



Transactions by year



National prices by month



National prices by quarter

alastair

gaius c wrote: »

Your ice cream stuff is the same sort of tautology as intelligent design is to evolution. It's for obfuscation, deflection and evasion not illumination.

Don't blame me if you can't follow straightforward points. The problem would seem to lie more in comprehension than articulation.

gaius c wrote: »

You're spoofing here. There's no real correlation between the number of transactions and prices. I'll post the raw data for you in the next post and you're welcome to have a go at trying to.

What increase in selling prices? Both CSO and PPR show a significant drop off in increases by the end of 2014.

CSO shows a 2.2% increase in the Dublin property price index for the final quarter of the year - as you're already aware. That's an increase in selling price - as already stated.

Barely Hedged

gaius c wrote: »

Any index that excludes half it's possible data points cannot by definition be definitive.

You misread/didnt understand my point:

"The CSO is useful for government planning and proper national and regional house price analysis as its demonstrates a correlation with economic indicators."

Mortgage sales are much more closely alligned with the change in underlying economic circumstances and give a better insight than cash sales do into the health of the market and trends that are developing. Trends that are then used for enacting planning and legislative orders.

So if we're talking about the health of the market on a regional/national level, there is only one measure to consider.

Also cash sales were 50% of the market last year. That was an outlier. In the UK, a comparable property market to our own, cash sales make up 20% to 30% of the market

The_Conductor

Is there any index showing the PPR annual changes per month (aka comparing Feb 2013 with Feb 2014- as opposed to the annualised 1st of Jan to 31st of Dec that the CSO seem so fond of?

If so- could someone post a chart showing the average and mean price changes for Dublin and nationally- for the 18 months up to Feb 2015 (no later- as there are too many gaps in the data).

I suspect there would be a few surprises in the data- which aren't highlighted in the annualised CSO data.

alastair

The_Conductor wrote: »

Is there any index showing the PPR annual changes per month (aka comparing Feb 2013 with Feb 2014- as opposed to the annualised 1st of Jan to 31st of Dec that the CSO seem so fond of?

If so- could someone post a chart showing the average and mean price changes for Dublin and nationally- for the 18 months up to Feb 2015 (no later- as there are too many gaps in the data).

I suspect there would be a few surprises in the data- which aren't highlighted in the annualised CSO data.

The value of that data is limited for precisely the same reason comparing any month's PPR data with another is limited. It takes no account of the nature of stock sold in any month (ignoring the incomplete listings, and absense of tax element on many of the properties that are listed). The CSO on the other hand, do take the nature, and location of sold stock into account, so you're closer to comparing like with like.

The PPR is never going to provide a meaningful alternative to a price index (unless you drill down to a local/street level yourself). Quite why there's this notion that the CSO are trying to pull the wool over your eyes is the mystery to me.

The_Conductor

alastair wrote: »

Quite why there's this notion that the CSO are trying to pull the wool over your eyes is the mystery to me.

The CSO aren't trying to pull the wool over our eyes- they are however normalising the data- so that it is giving a 'normalised' look at a much larger time frame. Its very difficult to pull figures out of it- other than historical data which has been revised (and they do revise their data even after they publish it). The PPR data is inaccurate by nature of the simple facts that there are a significant number of laggards supplying information to them- so the further back in time you go- the more accurate it is. The CSO data- is inaccurate- by virtue that it is only looking at mortgaged sales. Neither are ideal- in fact both have considerable and serious flaws which would under normal circumstances preclude their official use.

A very interesting statistic that they might come up with between them if they sat down together- is the evolution of property purchases around the country- what portion of them feature in CSO stats- and which are solely in PPR stats (aka where are the cash sales happening- and in addition- how they feature as a portion of overall sales on a local and regional basis).

People are suggesting that there are a disproportionate number of cash sales in the Dublin area- which with smaller mortgages being advanced to people- might put a spin on the data- e.g. that prices are falling in the Dublin area- where in actual fact- its simply that there are a far higher proportion (and number) of mortgages being advanced in the regions- than previously..........

Both the PPR and the CSO's data is useful- if you recognise and accept its limitations- and are intelligent enough to figure what the figures aren't saying- as much as what they are. You have to be able to join the dots- often where there may be a not inconsiderable number of dots missing altogether.........

Eugene Norman

Barely Hedged wrote: »

You misread/didnt understand my point:

"The CSO is useful for government planning and proper national and regional house price analysis as its demonstrates a correlation with economic indicators."

Mortgage sales are much more closely alligned with the change in underlying economic circumstances and give a better insight than cash sales do into the health of the market and trends that are developing. Trends that are then used for enacting planning and legislative orders.

So if we're talking about the health of the market on a regional/national level, there is only one measure to consider.

Also cash sales were 50% of the market last year. That was an outlier. In the UK, a comparable property market to our own, cash sales make up 20% to 30% of the market

Given that they did make up 50% of all sales it is even more spurious to ignore them. If cash sales drop off and mortgage buyers are curtailed then the future is fairly rocky.

I doubt if the UK is very comparable to Ireland anyway.

gaius c

Barely Hedged wrote: »

You misread/didnt understand my point:

"The CSO is useful for government planning and proper national and regional house price analysis as its demonstrates a correlation with economic indicators."

Mortgage sales are much more closely alligned with the change in underlying economic circumstances and give a better insight than cash sales do into the health of the market and trends that are developing. Trends that are then used for enacting planning and legislative orders.

So if we're talking about the health of the market on a regional/national level, there is only one measure to consider.

Also cash sales were 50% of the market last year. That was an outlier. In the UK, a comparable property market to our own, cash sales make up 20% to 30% of the market

Government national and regional planning (like where to build schools, roads or indeed, more houses) is informed by stuff you'd find in a census form, not house prices or "health of the property market".

gaius c

alastair wrote: »

Don't blame me if you can't follow straightforward points. The problem would seem to lie more in comprehension than articulation.

It's your chewbacca defence. We get it.

CSO shows a 2.2% increase in the Dublin property price index for the final quarter of the year - as you're already aware. That's an increase in selling price - as already stated.

Massive slowdown compared to what went before and immediately followed by a drop that cancelled that out. And your theory ignores the end of CGTE and attributes everything to CB rules which at that point had not actually been determined to go ahead, let alone be fully defined.

alastair

gaius c wrote: »

It's your chewbacca defence. We get it.

We? You clearly still don't.

gaius c wrote: »

Massive slowdown compared to what went before and immediately followed by a drop that cancelled that out. And your theory ignores the end of CGTE and attributes everything to CB rules which at that point had not actually been determined to go ahead, let alone be fully defined.

Growth in the price index is still growth, no matter that it's slower growth than that which preceded it. And the growth in the fourth quarter of Dublin prices hasn't been cancelled out by the first quarter 2015 figures. It's still marginally up for the first quarter according to the CSO, with additional growth back in April.

handlemaster

The indo now carry ing a story of some drop in dublin prices

http://m.independent.ie/business/personal-finance/property-mortgages/housing-market-starting-to-cool-as-capital-prices-drop-31353656.html

castle2012

It definitely confirm s what I have said in my area . prices have gone bananas. Outside and around Drogheda . The cap has pushed people outside the Dublin . it's understandable with average 3bed semi selling for round the 150k mark at the minute

Barely Hedged

gaius c wrote: »

Government national and regional planning (like where to build schools, roads or indeed, more houses) is informed by stuff you'd find in a census form, not house prices or "health of the property market".

Ahh yes - the government statistics office is producing statistics that are not used by the government. What do you think they use them for or do they just wait 5 years for the census?