Property price register analysis - slide continues

Monty Burnz

Ronan Lyons, DAFT economist, has carried out a like-for-like analysis of the data in the PPR and concluded that property prices continue to fall, although the rate of decline has slowed (perhaps as people try to buy before the end of tax reliefs). The reason you need to carry out a like-for-like comparison is as follows:

Imagine that the average selling price of property last year was 100k. This year, there are 10 sales - 9 of them for 3 bed houses in Limerick that go for 90k, and one giant mansion on Aylesbury Road that goes for 10 million. The average house price has now jumped to over one million euros!

This is clearly ridiculous, so you have to compare the 9 Limerick 3-beds with the prices similar properties sold for last year, and you need to compare the 10 million euro mansion with a similar mansion that was sold last year. That way you can see how the value of each type of property has changed in the last period.

And that's basically what a 'hedonic' analysis is in a property context - a like-for-like comparison.

Henry Ford III

No great surprise is it?

Fundamentally little has changed. No lending and therefore stunted qualified buyers. Throw in a glut of supply and hey presto prices continue to fall.

Seems there are isolated pockets of the country where demand (presumably from cash buyers or perhaps 7th sons of 7th sons) is strong and prices are stable.

It's hard to know where the floor will be, but I suspect we're not there yet.

coolgal52

It is difficult to see how we could have reached the floor yet, I agree given the state of the country. who knows though?!