Are house prices falling? Asking price drops would seem to indicate they are.

Floodzie

I see various headlines from TheJournal (same stable as daft.ie), the Irish Times (owners of MyHome.ie) and the Irish Independent (those purveyors of the glossy property supplement) talking about house price rises lately.

So can someone please explain this: http://www.myhome.ie/pricechanges/dublin

Almost every price change in the above link is downward.

- Are sellers becoming more realistic?
- Is there some sort of jiggery-pokery happening to stimulate these lists, to for example, generate entries on their twitter feed?
- Is there strong a relationship between falling asking prices and falling sales prices?
- And does this portend a fall in house prices as buyers adopt a 'wait and see' approach?

Eugene Norman

Floodzie wrote: »

I see various headlines from TheJournal (same stable as daft.ie), the Irish Times (owners of MyHome.ie) and the Irish Independent (those purveyors of the glossy property supplement) talking about house price rises lately.

So can someone please explain this: http://www.myhome.ie/pricechanges/dublin

Almost every price change in the above link is downward.

- Are sellers becoming more realistic?
- Is there some sort of jiggery-pokery happening to stimulate these lists, to for example, generate entries on their twitter feed?
- Is there strong a relationship between falling asking prices and falling sales prices?
- And does this portend a fall in house prices as buyers adopt a 'wait and see' approach?

There's a dedicated forum for this. Note that those falls are misleading because they may well be trying to generate interest and if something is going to sell and has offers over asking it's not going to appear in the app.

Floodzie

Sorry if I'm in the wrong thread :-) Is there an easy way to move it?

Slydice

Ah shur, download the data I thought...
Make a graph I thought...
Be easy I thought...
was it f***

But I did it anyway...

Now bare in mind that I think economists don't like to look at average prices.
Also kildare had a manor or something that sold for 26million in Jan so it's skewing kildares January.

Anyway, I got Jan-May from the property price register and here's how they look.

Here's how the Average prices look:

Godge

Slydice wrote: »

Ah shur, download the data I thought...
Make a graph I thought...
Be easy I thought...
was it f***

But I did it anyway...

Now bare in mind that I think economists don't like to look at average prices.
Also kildare had a manor or something that sold for 26million in Jan so it's skewing kildares January.

Anyway, I got Jan-May from the property price register and here's how they look.

Here's how the Average prices look:

Ups and downs, very different patterns, can you aggregate the data for a national picture?

Slydice

Damn, I had totals made up and everything. Just forgot to put them into the chart.

Same chart with Total included (grey line)

Godge

Would I be correct then in suggesting that the trends since the start of the year show a drop in January (as certain tax reliefs are less available and new rules for first-time buyers) followed by bumping along with little statistical change since then?

If so, the relevant y-o-y comparison might be better to give a clearer picture of where we are going. The January drop was widely predicted and expected for non-market reasons but since then changes have not been dramatic.

andrew

Slydice wrote: »

Ah shur, download the data I thought...
Make a graph I thought...
Be easy I thought...
was it f***

But I did it anyway...

Now bare in mind that I think economists don't like to look at average prices.
Also kildare had a manor or something that sold for 26million in Jan so it's skewing kildares January.

Anyway, I got Jan-May from the property price register and here's how they look.

Here's how the Average prices look:

Neat! If it's not too much trouble, what does the distribution of prices look like (for Dublin)? Could you plot the median price?

Larbre34

Does the average Wicklow price really now exceed the average Dublin price? I'd be surprised if that was the case.

murphaph

Larbre34 wrote: »

Does the average Wicklow price really now exceed the average Dublin price? I'd be surprised if that was the case.

The sample size is too small for most of the counties outside Dublin I suspect. That's why the 26mil pad in Kildare managed to have such a huge effect on the average price in that county. Similar probably happened in Wicklow. The fewer the transactions the less statistically significant the average price becomes.

I suspect that's why the Dublin trend is "steady" whereas many others are all over the shop due to the small numbers of transactions.

Aggregating nationally is basically pointless. The property market is simply not a national market. If you have a job in Dublin you generally need to live near there and what houses sell for in Donegal has almost no bearing on what they sell for in Dublin.

Larbre34

Good call, I hadn't considered the skew of trophy home prices on a small sample.

gaius c

Jan to May is much too short a time period to be looking at and ignores comparison with prices last year.

I track the PPR averages and whenever I get around to figuring out medians, I'll use them instead.

http://www.boards.ie/vbulletin/showpost.php?p=95567904&postcount=1661
http://www.boards.ie/vbulletin/showpost.php?p=95567906&postcount=1662
http://www.boards.ie/vbulletin/showpost.php?p=95567918&postcount=1663

I'll post these below for anyone interested.

gaius c

Larbre34 wrote: »

Good call, I hadn't considered the skew of trophy home prices on a small sample.

Limerick trends by month are especially pointless for this reason.

However, if you do trends by quarter, you have more data per point on the trend and you get a clearer picture.

gaius c

Time for an update.

National prices by month



National prices by quarter

gaius c

Transactions by month



Transactions by quarter



Transactions by year

gaius c

National trend by quarter



Dublin trend by quarter



GDA trend by quarter



Cork trend by quarter



Galway trend by quarter



Limerick trend by quarter

Godge

gaius c wrote: »

Dublin trend by quarter



GDA trend by quarter

Looking at those graphs for Dublin and surrounding areas, the trend is of slowly rising prices from Q1 2012 onwards with a spike in the middle of last year, presumably down to the announcement of new restrictions on first-time buyers.

The question is whether that spike is over and the slow rise continues or was the spike the peak of an irrational exuberance and prices will slowly fall from here?

Given the economic growth we are experiencing, a rise in prices (albeit gradual) sooner rather than later, perhaps confined to Dublin and the larger cities, seems inevitable.

Greyian

gaius c wrote: »

Time for an update.

National prices by month



National prices by quarter

gaius c wrote: »

Transactions by month



Transactions by quarter



Transactions by year

Out of interest, do these include the latest update (today's update) to the PPR?

According to PropertyPriceRegisterIreland, prices in Dublin fell in April. I know they exclude not-full-market-value sales, but that site also shows unit sales of 1151 in April, compared to 911 in your figures.

gaius c

Greyian wrote: »

Out of interest, do these include the latest update (today's update) to the PPR?

According to PropertyPriceRegisterIreland, prices in Dublin fell in April. I know they exclude not-full-market-value sales, but that site also shows unit sales of 1151 in April, compared to 911 in your figures.

No they don't. I update my file every week but only publish once a month, usually around the 19th or 20th.
The graphs above are the same graphs as I posted in A&P a fortnight ago.
They are relevant to illustrating why only looking at Jan-May is not a fruitful exercise.

Godge wrote: »

Looking at those graphs for Dublin and surrounding areas, the trend is of slowly rising prices from Q1 2012 onwards with a spike in the middle of last year, presumably down to the announcement of new restrictions on first-time buyers.

The question is whether that spike is over and the slow rise continues or was the spike the peak of an irrational exuberance and prices will slowly fall from here?

Given the economic growth we are experiencing, a rise in prices (albeit gradual) sooner rather than later, perhaps confined to Dublin and the larger cities, seems inevitable.

The PPR is a lagging indicator because it records sales that have closed, which would have gone sale agreed some time prior to that. So the summer spike you see in the trends would actually reflect sale agreeds from the spring. This was the peak of the mania and panic last year.

The new CB rules were not announced until October 2014 by which stage the market was already stagnating. We don't know for sure what effect the CB rules will have in the short/medium term (long term is down down down IMO) but the big drop in the trend for Q3 2014 is definitely not attributable to the CB rules.