Property prices resume fall

Monty Burnz

http://www.rte.ie/news/2012/1126/residential-property-prices-falling-again-business.html

House prices fell in October, resuming their downward slide after two months of gains.
The latest Residential Property Price index from the CSO showed a 0.6% fall nationally in October.
The index measures prices of homes purchased with a mortgage and excludes cash sales,
Residential property prices in Dublin fell 0.2%.
Following those two months of price increases the annual rate of decline continues to moderate. In October house prices had fallen by 8.1% over the previous 12 months. In September the rate of decline was 9.6%.
In October of last year the annual rate at which house prices were falling was measured at over 15%.
According to the CSO index House prices in Dublin are now 55% lower than at their peak in 2007 and apartment prices are 63% lower.
Residential prices for the rest of the country have fallen by 47% since February 2007.

Property bulls with egg on their faces again. 5 years worth of egg at this stage...

Zamboni

And that is despite the rush of FTBers for MIR and before the budget.
2013 is a cliff.

You'd think there would be threads entitled Ode to Treehouse72 rather than Killers1 on this board...

highgiant1985

Zamboni wrote: »

And that is despite the rush of FTBers for MIR and before the budget.
2013 is a cliff.

You'd think there would be threads entitled Ode to Treehouse72 rather than Killers1 on this board...

forgive my ignorance here but who is treehouse72?

I'm aware of Killers1 and regard him v highly for all his help.

Zamboni

There is a search function on the forum

Brussels Sprout

Pity Goody2Shoes was banned-I'd like to hear their spin on this

bombs away

wonder if the Indo will mention it at all or will they still spout on all their bull**** about how we've turned the corner and all that crap.

Monty Burnz

bombs away wrote: »

wonder if the Indo will mention it at all or will they still spout on all their bull**** about how we've turned the corner and all that crap.

They have already resumed their pro-Fianna Failure propaganda, so I would expect them to either I ignore it or pin the blame on the coalition somehow.

gmisk

bombs away wrote: »

wonder if the Indo will mention it at all or will they still spout on all their bull**** about how we've turned the corner and all that crap.

http://www.independent.ie/business/personal-finance/property-mortgages/house-prices-go-into-reverse-as-property-register-takes-guesswork-out-of-buying-3307545.html
(First item in business section)

Directly below it...
Hint of market confidence as Burlington Hotel sells for €67m

Sooooo it was sold previously for €288m in 2007.................so it selling for 67m is a sign of confidence?

lotusm

link below suggests the fall is greater than 10% http://www.myhome.ie/pricechanges

RATM

Looks like a mini-dead cat bounce, the rush to get a house bought for the MIR gave the market a temporary jolt up.

Sleepy

Or just the simple fact that the volume of transactions is still so low that price movements month on month aren't a reliable indicator of much...

Forest Demon

The house price register has been a great addition (too late) to the market. Nobody wants to pay more then the going rate in an area. Still some amount of BS with estate agents and it is good to tell them the prices of the last 5 or so houses sold in the area. It also is an eye opener for people who are still vastly overpricing their property's despite the fact that they have been on the market for ages. Denial is not only a river in Egypt.

I do think that the crappy value in the rental market in city's in Ireland will lead people back towards buying homes when things improve in the economy and Europe. Although then we will have increasing interest rates putting pressure on the market.

I don't see where the recovery is going to come from in rural and remote areas at all with the increase of transport costs and lack of employment prospects. The interest only lark can only continue for so long for home owners. Eventually there is going to be a bloodbath for multiple property owners in distress as they don't have any pubic or political support. A lot of family homes were used as collateral when people bought additional property's. Whatever about the appetite for the original bailout I just cant see people standing for a second round of bailouts for residential property and still letting private landlords keep their distressed property's. Still the property tax and to come. No sign of unemployment improving. In this era of austerity it is getting more and more difficult for young couples and family's to save for a deposit.

Still a bit to go to collate house prices with the salary's of the people expecting to live in those areas. Still so much interference and BS in the market that there is only one way prices will go until reality is faced up too. I predict that Ireland will be flooded with repossessions at some stage over the next 5 years.

howamidifferent

Still pushing property here...

http://www.independent.ie/business/personal-finance/property-mortgages/property-hope-as-mortgages-up-for-first-time-in-six-years-3287217.html

Forest Demon

howamidifferent wrote: »

Still pushing property here...

http://www.independent.ie/business/personal-finance/property-mortgages/property-hope-as-mortgages-up-for-first-time-in-six-years-3287217.html

Most are probably bank staff

Henry Ford III

Reducing prices will continue as the fundamentals determining price haven't changed.

People are being squeezed financially.

Credit is extremely tight.

Demand is depressed.

Supply is still largely plentiful.

davet82

Brussels Sprout wrote: »

Pity Goody2Shoes was banned-I'd like to hear their spin on this

first person i thought of when i seen this article :pac:

Monty Burnz

Sleepy wrote: »

Or just the simple fact that the volume of transactions is still so low that price movements month on month aren't a reliable indicator of much...

Except that the trend has been resolutely downwards for years towards more realistic levels. Ironically, we are now at about reasonable prices... For the economy of 2007. Now we just have to account for national bankruptcy and record levels of personal debt.

Sleepy

Hence why I said "month-on-month". IMO, the rises we were seeing reported for the previous months were statistical anomalies caused by the small volume of houses moving.

If only small numbers of transactions are taking place and month a has 20 3 bed houses sell at 100k whilst month b has 20 sell at 105k can we really extrapolate that the average price of 3 bed houses is rising? Or could it be that the houses sold in month b were bigger, in better nick, better areas, etc.?

With large data sets these differences are more likely to balance themselves out month to month to allow average house price comparisons but when there's such a small level of activity, out-liers are more likely to skew the figures.

Monty Burnz

Sleepy wrote: »

If only small numbers of transactions are taking place and month a has 20 3 bed houses sell at 100k whilst month b has 20 sell at 105k can we really extrapolate that the average price of 3 bed houses is rising? Or could it be that the houses sold in month b were bigger, in better nick, better areas, etc.?

Well you can get a more accurate read in spite of those issues by using a hedonic regression.

With large data sets these differences are more likely to balance themselves out month to month to allow average house price comparisons but when there's such a small level of activity, out-liers are more likely to skew the figures.

True.

murphaph

Henry Ford III wrote: »

Reducing prices will continue as the fundamentals determining price haven't changed.

People are being squeezed financially.

True, but renting in Dublin at the moment is certainly more expensive than buying (assume 1 bed apartment in city centre area), so buying could potentially save the occupant some of that squeeze.

Henry Ford III wrote: »

Credit is extremely tight.

True. This is the main reason I believe prices are where they are. The Irish will tend to buy, if they can.

Henry Ford III wrote: »

Demand is depressed.

Demand for accommodation is regionally depressed and in some regions (notably Dublin) it is in fairly high demand.

Henry Ford III wrote: »

Supply is still largely plentiful.

Again, largely regional. In Dublin most people looking for rentals at the moment will report of fewer properties being available than some people might like to think.

So, in summary: it's all regional.

bombs away

That may be except for that fact that prices are down nationwide for the month of October

So In summary ...... It ain't regional

I guess that proves the "dead cat bounce" theory correct.

CelticRambler

How about people who bought on the fringes of the Pale deciding in the summer to grab a place closer to Dublin while they had the chance. Summer/autumn is a good time to move, get into the new place before Christmas, save on commuting costs if you've still got a job to go to or be closer to the airport if you don't. Dump the place in Wicklow/Kildare/Meath/Louth for whatever price you can get. Statistical rise for a few months, then back to a stagnant/falling market for the rest of the year.

Rodin

Good stuff.

Hopefully when I can afford to buy in a couple of years that I'll get a bargain

gmisk

http://www.myhome.ie/residential/brochure/apt-54-bloomfield-donnybrook-dublin-4/2212913
There on the up....sure this one bed has jumped up 100k.......joke price

Monty Burnz

gmisk wrote: »

http://www.myhome.ie/residential/brochure/apt-54-bloomfield-donnybrook-dublin-4/2212913
There on the up....sure this one bed has jumped up 100k.......joke price

That place isn't for sale at all. What lunatic is going to pay over half a million dollars for a tiny one bed apartment in a bankrupt country?

I presume this is some wheeze whereby they are being forced to sold by a bank but don't want to, so they put it on at a price that would have been optimistic in 2007.

lotusm

same again I say for a 2 bed.... this is mad stuff...this could not be real
http://www.myhome.ie/residential/brochure/the-court-killiney-bay-killiney-co-dublin/135820


The Court, Killiney Bay, Killiney, Co. Dublin
€795,000
- 2 Bed Apartment 122 m² / 1313 ft² For Sale

who_ru

Forest Demon wrote: »

The house price register has been a great addition (too late) to the market. Nobody wants to pay more then the going rate in an area. Still some amount of BS with estate agents and it is good to tell them the prices of the last 5 or so houses sold in the area. It also is an eye opener for people who are still vastly overpricing their property's despite the fact that they have been on the market for ages. Denial is not only a river in Egypt.

I do think that the crappy value in the rental market in city's in Ireland will lead people back towards buying homes when things improve in the economy and Europe. Although then we will have increasing interest rates putting pressure on the market.

I don't see where the recovery is going to come from in rural and remote areas at all with the increase of transport costs and lack of employment prospects. The interest only lark can only continue for so long for home owners. Eventually there is going to be a bloodbath for multiple property owners in distress as they don't have any pubic or political support. A lot of family homes were used as collateral when people bought additional property's. Whatever about the appetite for the original bailout I just cant see people standing for a second round of bailouts for residential property and still letting private landlords keep their distressed property's. Still the property tax and to come. No sign of unemployment improving. In this era of austerity it is getting more and more difficult for young couples and family's to save for a deposit.

Still a bit to go to collate house prices with the salary's of the people expecting to live in those areas. Still so much interference and BS in the market that there is only one way prices will go until reality is faced up too. I predict that Ireland will be flooded with repossessions at some stage over the next 5 years.

I agree with everything you say except the part about repossessions. I can't see this Govt having the balls to allow nationalised banks make repossession orders on houses while they themselves are still dependent upon taxpayers for funding.

I mean AIB is a dead duck, there isn't an investor in the world that would touch it now, PTSB is every bit as bad. Repossessions on BTL properties should already have happened by now, and yet nothing happens.

Even the Personal Insolvency Bill has yet to become law and this Govt is in power over 18 months.

The outlaw

Forest Demon wrote: »

Still so much interference and BS in the market that there is only one way prices will go until reality is faced up too. I predict that Ireland will be flooded with repossessions at some stage over the next 5 years.

Yes it all depends really on whether the banks will restructure mortgages in such a way to avoid repossessions (eg converting debt of €50,000 into a 30 year loan for a retired couple to be able pay back -quoted by some as inter-generational mortgages) or if the banks will turn on the mortgage holders for the small amounts owed in some cases. (The latter seems to be the case when you read about repossessions in the courts)
This article gives the impression of being accurate and devoid of spoof (e.g by saying:
[FONT=Verdana, sans-serif]'In October house prices had fallen by 8.1% over the previous 12 months')
when in reality the CSO figures do not include cash sales which are believed to be up to 40% of sales - It's like doing a book report when you haven't read 40% of the book.
[/FONT]

makeorbrake

The outlaw wrote: »

..when in reality the CSO figures do not include cash sales which are believed to be up to 40% of sales - It's like doing a book report when you haven't read 40% of the book

Is it? Are cash sales not likely to achieve improved deals by comparison with financed deals?

Zamboni

The outlaw wrote: »

Yes it all depends really on whether the banks will restructure mortgages in such a way to avoid repossessions (eg converting debt of €50,000 into a 30 year loan for a retired couple to be able pay back -quoted by some as inter-generational mortgages) or if the banks will turn on the mortgage holders for the small amounts owed in some cases. (The latter seems to be the case when you read about repossessions in the courts)
This article gives the impression of being accurate and devoid of spoof (e.g by saying:
[FONT=Verdana, sans-serif]'In October house prices had fallen by 8.1% over the previous 12 months')
when in reality the CSO figures do not include cash sales which are believed to be up to 40% of sales - It's like doing a book report when you haven't read 40% of the book.
[/FONT]

The RTE article - 3rd sentence

The index measures prices of homes purchased with a mortgage and excludes cash sales

Crystal clear.

nomoreindie

makeorbrake wrote: »

Is it? Are cash sales not likely to achieve improved deals by comparison with financed deals?

you would expect cash payers to get a discount on asking compared to someone relying on a mortgage or with a house to sell as well

makeorbrake

nomoreindie wrote: »

you would expect cash payers to get a discount on asking compared to someone relying on a mortgage or with a house to sell as well

Ok, that's what I thought. Therefore, although the data excluded cash sales, there is no reason to believe that property sales achieved were found to be any better than the 0.6% fall recorded.

TheDriver

cash sales don't get massive discounts either as people are quite willing to be sale agreed for an extra month if it means more cash from a mortgage holder.

makeorbrake

TheDriver wrote: »

cash sales don't get massive discounts either as people are quite willing to be sale agreed for an extra month if it means more cash from a mortgage holder.

Within reason. You don't know for sure if a completion is going to be achieved until it actually has. I recently viewed a house that had been sale agreed 3 times - keeping it off the market for many months.

gaius c

Sleepy wrote: »

Or just the simple fact that the volume of transactions is still so low that price movements month on month aren't a reliable indicator of much...

Or how about the CSO not taking account of cash transactions, which are apparently 40% of the market?
Edit: see it's been covered...

TKline

Good to see prices continue to return to more affordable levels.

The amazing thing about the Irish bubble and its collapse is the change in the house price to rent ratio, which was more extreme than anything seen anywhere else in the world.

More details here... What a real property boom/bubble looks like - Ireland



When house prices move out of alignment with the fundamentals (rents and incomes) then a reversion to mean is inevitable.

lotusm

I was at the allsop acution... The mood was more sombre than previous auctions... Also alot of the properties sold very near the reserve or just above ... Yields on investment properties ranged from 8 to 15 per cent. However you will need that as the government announcing more taxes on rental income in the way of PRSI and I'm sure there is more...