Houseprices drop in August.

Snakeblood

The August 2011 indices from the CSO were published this morning.

Overall 1.6% decline in the month, 13.9% in the past 12 months, 21.3% since NAMA valuation date (Nov 2009)

And a monthly decline of 6% for Dublin apartments, the steepest on record.

http://www.cso.ie/releasespublications/documents/prices/2011/rppi_aug2011.pdf

Via namawinelake on the propertypin

It's speeding up.

quozl

Those are some drops for a single month in Dublin. -3.4% for Dublin houses too.

I am expecting further significant drops but for one single month that is almost shocking.

Snakeblood

quozl wrote: »

Those are some drops for a single month in Dublin. -3.4% for Dublin houses too.

I am expecting further significant drops but for one single month that is almost shocking.

I suppose you could say that prices tend to be dropped more during Aug\Sep than during June\Jul because of the perceived seasonality of the market. So maybe the natural decline of 3 months got stacked up into August.

Just a guess though.

quozl

I had wondered the same but Namawinelake doesn't think there's a perceivable seasonality to the price drops, just to the volumes of sale.

He's usually very good with his analysis of figures.

Snakeblood

quozl wrote: »

I had wondered the same but Namawinelake doesn't think there's a perceivable seasonality to the price drops, just to the volumes of sale.

He's usually very good with his analysis of figures.

Hmmm. Then maybe people are getting nervous and wanting to shift the houses now before further European meltdown nukes whatever value remaining they thought they could get.

Monty Burnz

I honestly don't see how house prices could be considered seasonal - sure, the volume of sales is seasonal to some degree, but why would this impact the price that deals go through at? I don't think people are thinking 'sure it's August, the house is only worth value*.97 this week'.

Interesting observation that the average Dublin property lost €300 PER DAY in the last month.

But always remember, rent is dead money, folks. :rolleyes:

Crazy Horse 6

I'd say there is a few more years of this to go yet folks. I think when this is all said and done we'll be looking at between 100-125k for the average 3 bed semi in the Dublin area.

The Scientician

Am I right in thinking they'll probably continue to drop as long as outward migration is higher than inward?

Snakeblood

The Scientician wrote: »

Am I right in thinking they'll probably continue to drop as long as outward migration is higher than inward?

I think in the abstract, no. It's not the only factor affecting prices. There can be further wage drops etc, or economic uncertainty which affect peoples power or inclination to buy.

yosser hughes

The drip drip drip goes on,but this month is dramatic. Yet we still hear people saying now is the time to buy:eek:
How many billion in cuts in the next budget? Unemployment growing not to mention the euro crisis,yet I guarantee you will here some eejit say there is grea "bargains" to be had.:rolleyes:
Rent is dead money indeed!:rolleyes:

subway

great news thats my rent paid for the next 2 years (savings on the purchase price)

johndaman66

The Scientician wrote: »

Am I right in thinking they'll probably continue to drop as long as outward migration is higher than inward?

Interesting you should mention that. I heard a statistic mentioned on the radio this morning that imigration is still outstripping emigration despite everything thats happening. Now I'm not for one moment suggesting you are incorrect, just mentioning what I heard, personally I don't know what to believe. I do suppose you need to drill further into the figures. If it is foreign nationals immigrating into the country, they will in general tend to rent. Irish nationals who are potential first time buyers or at least will be a few years down the line might be making up the bulk of those emmigrating. I do appreciate too that less rental property available and greater demand would potentailly have a knock on affect on asking prices, despite the general downward trend on property prices.

johndaman66

I must say that when doing my regular check on collapso.net over the past 6 weeks or therabouts I have noticed quite a larger number of price drops than I would usually expect. Some of the drops quite severe too both in monetary and percentage terms.

johndaman66

johndaman66 wrote: »

I must say that when doing my regular check on collapso.net over the past 6 weeks or therabouts I have noticed quite a larger number of price drops than I would usually expect. Some of the drops quite severe too both in monetary and percentage terms.

Thank you for making me aware of that site.

johndaman66

Deleted User wrote: »

Thank you for making me aware of that site.

Your most welcome Venjur. I find it to be the best property tracking site. Of late it also tracks myhome.ie in addition to daft. The site gets top marks from me!

Treehouse72

A certain Status Quo song comes to mind, and it's not Rockin' All Over the World...

Snakeblood

Treehouse72 wrote: »

A certain Status Quo song comes to mind, and it's not Rockin' All Over the World...

Good, because that's a John Fogerty song.:mad:

https://www.youtube.com/watch?v=HNOK9wmPaxA

Spiritofthekop

johndaman66 wrote: »

Your most welcome Venjur. I find it to be the best property tracking site. Of late it also tracks myhome.ie in addition to daft. The site gets top marks from me!

How does the site know what the house actually sold for??

I know some people who picked up a house 115,000 less than the asking price on daft.ie.

it says house sold now on daft was only on market for a month, they went in with offer that low and it got accepted immediately.

house next door to it sold for 950,000 3.5 years ago.

went for 390,000, they should of still waited till next year at least but the had other reasons that made them move quickly

derealbadger

Spiritofthekop wrote: »

How does the site know what the house actually sold for??

I know some people who picked up a house 115,000 less than the asking price on daft.ie.

it says house sold now on daft was only on market for a month, they went in with offer that low and it got accepted immediately.

house next door to it sold for 950,000 3.5 years ago.

went for 390,000, they should of still waited till next year at least but the had other reasons that made them move quickly

it just tracks asking price drops

johndaman66

Spiritofthekop wrote: »

How does the site know what the house actually sold for??

I know some people who picked up a house 115,000 less than the asking price on daft.ie.

it says house sold now on daft was only on market for a month, they went in with offer that low and it got accepted immediately.

house next door to it sold for 950,000 3.5 years ago.

went for 390,000, they should of still waited till next year at least but the had other reasons that made them move quickly

The people running the site don't know and how could they know, actual selling prices are not public knowledge as of yet. To the best of my knowledge a public database of selling prices was to be established with a while now but our successive governments have being dragging their heels on it. In fairness the site is constrained by the information available to it or lack thereoff. I would think at least 99% of housebuyers these days know that asking prices and actual selling prices don't correlate these times or at least they certainly should know.

My point merely was that I thought it was the best property tracking website if you do use them and they are all constrained by lack of knowledge on actual selling prices to be fair...sorry if my post was otherwise misleading.

Re the house sale your reference: Without seeing the house or knowing more details about it I sincerely cannot say if your friends done well for themselves or not acquiring the house for €115k less than asking price. It may have being way overpriced at €505k and they may have paid over the odds for it at €390k in todays market for all I know for that matter. By the way how do you/ your friends know that the house next door sold for €950k three and a half years ago?

MrThrifty

Ummm... I feel it needs to be said that despite falling house price, there are still people out there happy to buy at the moment. These might be couples in their late 20s and early 30s who didn't have a reason to buy during the boom (usually because they weren't a couple then!) and also the smart ones who just watched and sat back waiting...

There are typically professional couples out there who have been earning ~40-60k each a year for the last few years and even after tax and rent etc, these couples could easily have accumulated savings of 100s of k. If folk take issue with those salary figures, then consider a couple each on the so-called average industrial wage of ~35k for 10 years and it amounts to the same thing. I also know of couples where one of them is in the public sector and the banks seem happy out handing out a mortgage because of the perceived job security etc.

Buying a house now is the same as buying a new car. It makes no sense to many, but people who have the money will buy what they want, no matter what others think of it from an investment point of view.

Jo King

The key issue is the rate of household formation. It appears that households are being formed at a rate faster than houses are being built. This is reducing the overhang and is also creating a shortage of rental properties for families in certain areas. As rents become more expensive the attractions of buying will encourage buyers. For families the issue of security of tenure becomes important as is the ability to use their own furniture, carry out structural alterations, choose their own kitchen units etc.
It appears that 3 or 4 bed family homes o rent are now scarce and expensive in certain areas of Dublin.

Snakeblood

I'm not sure why the formation of families is more important than the prices of houses. Sellers are asking for too much, and the banks won't give out mortgages. Buyers won't give ludicrous figures (and prices are still way overvalued compared to if you track inflation since 1996 in the housing market).

If people want the market to recover and houses to start selling, there needs to be transparency in house prices (with the coming house price register) and there needs to be an admission by houseowners who want to sell that the house they brought for 500,000 is worth less than 200,000 now. That'll kick start the market.

Monty Burnz

Jo King wrote: »

The key issue is the rate of household formation. It appears that households are being formed at a rate faster than houses are being built. This is reducing the overhang and is also creating a shortage of rental properties for families in certain areas. As rents become more expensive the attractions of buying will encourage buyers. For families the issue of security of tenure becomes important as is the ability to use their own furniture, carry out structural alterations, choose their own kitchen units etc.
It appears that 3 or 4 bed family homes o rent are now scarce and expensive in certain areas of Dublin.

With all due respect, rehashing the rhetoric of 2005 isn't going to convince people that prices are about to start rising. Prices will continue to fall for years, and will then stagnate for years. These are the empirical lessons of property bubbles, lessons that the Irish people should learn from having failed to learn during the bubble that there was no such thing as a soft landing.

WalterMitty

Academic studies show house price growth is driven by household formation AND household income growth. IF formation is growing and incomes after tax and essential costs still falling. The fact there is a credit drought further adds to downward pressure on sales prices but rents may bounce up in years to come as couples and younger workers and immigrant workers need places to rent.

Monty Burnz

WalterMitty wrote: »

Academic studies show house price growth is driven by household formation AND household income growth. IF formation is growing and incomes after tax and essential costs still falling. The fact there is a credit drought further adds to downward pressure on sales prices but rents may bounce up in years to come as couples and younger workers and immigrant workers need places to rent.

Any chance of a link to some of these studies?

I'd imagine that there are many, many factors that affect the cost of property.

mathie

MrThrifty wrote: »

Ummm... I feel it needs to be said that despite falling house price, there are still people out there happy to buy at the moment. These might be couples in their late 20s and early 30s who didn't have a reason to buy during the boom (usually because they weren't a couple then!) and also the smart ones who just watched and sat back waiting...

There are typically professional couples out there who have been earning ~40-60k each a year for the last few years and even after tax and rent etc, these couples could easily have accumulated savings of 100s of k. If folk take issue with those salary figures, then consider a couple each on the so-called average industrial wage of ~35k for 10 years and it amounts to the same thing. I also know of couples where one of them is in the public sector and the banks seem happy out handing out a mortgage because of the perceived job security etc.

Buying a house now is the same as buying a new car. It makes no sense to many, but people who have the money will buy what they want, no matter what others think of it from an investment point of view.

... and that's where it went wrong.
People thinkingof it from an investment point of view.

RATM

WalterMitty wrote: »

Academic studies show house price growth is driven by household formation AND household income growth. IF formation is growing and incomes after tax and essential costs still falling. The fact there is a credit drought further adds to downward pressure on sales prices but rents may bounce up in years to come as couples and younger workers and immigrant workers need places to rent.

Government reducing rent allowance in next budget will push rents downward.

House price decline is driven by unemployment, of which we have a record 15%. The true figure is probably closer to 18% when you include those on FAS courses. Probably closer to 22-25% if you included those who have had to emigrate.

So long as we have circa 20% of workers on some form of dole then house prices will continue to go south.

Treehouse72

WalterMitty wrote: »

The fact there is a credit drought...

Are you sure it's a drought and not just a reversion to mean?

My view is that credit will almost certainly loosen up again in the coming years, but never so much that it will bring 2006 back, nor so much that it will outpace the other variables that are driving down prices.