July CSO Figures

kennyb3

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexjuly2014/#.U_2vufldXT9


In the year to July, residential property prices at a national level, increased by 13.4%. This compares with an increase of 12.5% in June and an increase of 2.3% recorded in the twelve months to July 2013. See Table 1.
Residential property prices rose by 2.0% in the month of July. This compares with an increase of 2.9% recorded in June and an increase of 1.2% recorded in July of last year. See Table 1.

In Dublin residential property prices grew by 2.7% in July and were 23.2% higher than a year ago. Dublin house prices rose by 2.5% in the month and were 23.1% higher compared to a year earlier. Dublin apartment prices were 26.3% higher when compared with the same month of 2013. See Tables 6, 7 and 8. However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.

The price of residential properties in the Rest of Ireland (i.e. excluding Dublin) rose by 1.3% in July compared with a decrease of 0.1% in July of last year. Prices were 4.9% higher than in July 2013. See Table 4.

Overall Decline

House prices in Dublin are 41.2% lower than at their highest level in early 2007. Apartments in Dublin are 48.4% lower than they were in February 2007. Residential property prices in Dublin are 43.0% lower than at their highest level in February 2007. The price of residential properties in the Rest of Ireland is 45.1% lower than their highest level in September 2007. Overall, the national index is 42.3% lower than its highest level in 2007. See Tables 7, 8, 6, 4 and 1.

lima

This bit is comforting:

"House prices in Dublin are 41.2% lower than at their highest level in early 2007. Apartments in Dublin are 48.4% lower than they were in February 2007."

I'll be legging it abroad to the other half's country in a few years so still thinking about buying (and renting out when I move - just to have somewhere in case we come back).. Should I buy now or in 6-8 months is the question..

desertcircus

23% rises in one year is madness and utterly unsustainable. If that rate remains constant, Dublin would be back to full peak prices before Christmas 2016 - except without tracker mortgages, 100% mortgages, or half the banks.

kennyb3

lima wrote: »

This bit is comforting:

"House prices in Dublin are 41.2% lower than at their highest level in early 2007. Apartments in Dublin are 48.4% lower than they were in February 2007."

I'll be legging it abroad to the other half's country in a few years so still thinking about buying (and renting out when I move - just to have somewhere in case we come back).. Should I buy now or in 6-8 months is the question..

How is that comforting? You're indicating that the highest point of a bubble price is a good basis to determine value from. Or what exactly do you mean? If your time horizon is only 6-8 months buying now seems the logical choice, if it's 2/3/5 years it depends on your outlook on things.

I posted this on the property pin;

Table 7 (Dublin houses) - from a low of 61 points in Feb 2012 to 81 points July 2014 (32.8% increase). Some rise that when it includes plenty of less desirable areas! With most of it coming since May 2013 (62.6 points to 81 = 29.4% in 14 months)

Rises of 3.1%, 4.4%, 3.1% & 2.5% in last 4 months (10.35% overall - 73.4 to 81).

Crazy.

Very little comfort for someone paying 20% more this year than last that, they are getting a big reduction on the peak of a bubble.

Many areas of Dublin now represent poor value with, for example - an area I've followed is Malahide -, 3 bed semi's in Seabury getting nearly €450 per sq foot now compared to sub €300 per sq foot in late 2012.

€400+ per sq foot for those houses is nuts.

Zamboni

Overall Decline

House prices in Dublin are 41.2% lower than at their highest level in early 2007.

Rubbish.
There are South Dublin properties are selling for the same prices they were in 2007.
New buyers with SVRs and no TRS / Stamp Duty relief.
If that is not insanity I don't what is.

All the next generation gleefully rushing to pay for the problems of the last.

lima

kennyb3 wrote: »

How is that comforting? You're indicating that the highest point of a bubble price is a good basis to determine value from. Or what exactly do you mean? If your time horizon is only 6-8 months buying now seems the logical choice, if it's 2/3/5 years it depends on your outlook on things.

I mean that it's comforting to know that even with the extreme increases we are not yet subject to the absolutely mad prices that so many got stung with at the peak. I agree it's a rip off right now and some people may be kicking themselves that they should have bought last year, but there's still room to make a buck or two and that will unfortunately keep speculators in the game, to the detriment of the innocent ftb citizens of this country the govt is meant to represent.

It is a nasty, hideous country that offers no hope to the young, other than force them to emigrate to better their lives in another land.

kennyb3

Zamboni wrote: »

Rubbish.
There are South Dublin properties are selling for the same prices they were in 2007.
New buyers with SVRs and no TRS / Stamp Duty relief.
If that is not insanity I don't what is.

All the next generation gleefully rushing to pay for the problems of the last.

Agree - you always have to remember it's an average of all of Dublin.

Certain areas still 50%+ off peak, others not far off at all (not sure about the same).

kennyb3

lima wrote: »

I mean that it's comforting to know that even with the extreme increases we are not yet subject to the absolutely mad prices that so many got stung with at the peak. I agree it's a rip off right now and some people may be kicking themselves that they should have bought last year, but there's still room to make a buck or two and that will unfortunately keep speculators in the game, to the detriment of the innocent ftb citizens of this country the govt is meant to represent.

It is a nasty, hideous country that offers no hope to the young, other than force them to emigrate to better their lives in another land.

A lot of the prices are absolutely mad imho - depends where you're looking really.

lima

kennyb3 wrote: »

A lot of the prices are absolutely mad imho - depends where your looking really.

True, I guess I only know about what I am interested in - 2br apartments or townhouses close to the city centre or in decent suburbs

mr_seer

lima wrote: »

I mean that it's comforting to know that even with the extreme increases we are not yet subject to the absolutely mad prices that so many got stung with at the peak. I agree it's a rip off right now and some people may be kicking themselves that they should have bought last year, but there's still room to make a buck or two and that will unfortunately keep speculators in the game, to the detriment of the innocent ftb citizens of this country the govt is meant to represent.

It is a nasty, hideous country that offers no hope to the young, other than force them to emigrate to better their lives in another land.

"but there's still room to make a buck or two and that will unfortunately keep speculators in the game". Reading this post is like taking a step back in time to 2006. You will very likely loose a lot of money

lima

mr_seer wrote: »

"but there's still room to make a buck or two and that will unfortunately keep speculators in the game". Reading this post is like taking a step back in time to 2006. You will very likely loose a lot of money

It's true though, I am trying to buy my first home but every time I go to see a house the other viewers are all 60+ with cash and willing to pay well over asking. The older middle class are destroying this place for the younger ones.

mr_seer

The heat is going to go out of it pretty soon and the result will be the same as in 2006. Don't get caught in the frenzy like people did in 2006. You will probably regret it for the rest of your life. The only way anyone should buy a family home is if you find one that you can comfortably afford, that you would be happy living in for the rest of your life. The idea of a property ladder is nonsense made up by property sales people

jay0109

mr_seer wrote: »

The heat is going to go out of it pretty soon and the result will be the same as in 2006.

Folk have been saying that since late 2012 and I'm still waiting and rapidly running out of time

bidiots

Running out of time? Dangerous words.

jay0109

Kids are appearing out of nowhere and getting bigger!

mr_seer

jay0109 wrote: »

Kids are appearing out of nowhere and getting bigger!

I hear ya pal. One going to be starting school in September 2015 and one just had his first birthday. I have the deposit, I have the repayment capacity but there is not a single house within my price range where I would be happy raising the family. I am on a good income and the OH makes decent enough money. I am not going to settle for permanent sub standard accommodation when I am absolutely convinced that this madness will end in time

jay0109

mr_seer wrote: »

I hear ya pal. One going to be starting school in September 2015 and one just had his first birthday. I have the deposit, I have the repayment capacity but there is not a single house within my price range where I would be happy raising the family. I am on a good income and the OH makes decent enough money. I am not going to settle for permanent sub standard accommodation when I am absolutely convinced that this madness will end in time

In the exact same boat as you except with 1 more kid! Agree with all the above, except the last line....I can never see housing madness come to an end in Ireland in some form or another

Villa05

jay0109 wrote: »

In the exact same boat as you except with 1 more kid! Agree with all the above, except the last line....I can never see housing madness come to an end in Ireland in some form or another

The very fact that it is mad means that it will end hard again. The higher the rises the harder the fall plus you have the debris not yet cleaned up from the most recent falls ie the arrears, the massive public debt.

mr_seer

Villa05 wrote: »

The very fact that it is mad means that it will end hard again. The higher the rises the harder the fall plus you have the debris not yet cleaned up from the most recent falls ie the arrears, the massive public debt.

I've said on Boards.ie before that the main reason the Irish Economy tanked before is because our house prices were too high. If we had house prices correlating to a reasonable factor or people's incomes in 2007, we would have been able to get through the crisis virtually unscathed. We are exposing the economy to the same risks. Any external shock and Irish prices will back to 1980

Villa05

No need to look for an external shock. check out the core stats for the under 35's. unemployment, emigration, pay scales. Hell even many of those with jobs are choosing to leave. This country has thrown them to the wolves to protect their own asses. shamefull and not without consequences

who_ru

I wonder how many of the cash buyers are retiring public servants with massive lump sums.

I read somewhere recently that some teachers were walking away with 200k in their pocket. Dirt at 41%, low interest rates for deposits also. Making property an attractive investment. FG/LAB working hard to ensure the already well off become wealthier. Young people in this country are on a hiding to nothing.

Oh and it just so happens that the Govt are now talking of reversing public sector pay cuts. Is there an election due in the next 2 years? Shows what this Govt priorities are.

moxin

Wait till end of 2014 when the investor\speculator tax incentive runs out, who will fill in the sales void then?

mr_seer

moxin wrote: »

Wait till end of 2014 when the investor\speculator tax incentive runs out, who will fill in the sales void then?

It wouldn't surprise me if the Fat Zombie brazenly extended it for another year. He might even try to say that it is a supply side initiative!!

Geuze

who_ru wrote: »

I wonder how many of the cash buyers are retiring public servants with massive lump sums.

I read somewhere recently that some teachers were walking away with 200k in their pocket.

Impossible. Most a teacher could get is maybe 110k.

A principal could get more, maybe 140k-150k max.

who_ru

Geuze wrote: »

Impossible. Most a teacher could get is maybe 110k.

A principal could get more, maybe 140k-150k max.

not impossible at all.......these figures are from 2013.............

http://www.irishexaminer.com/ireland/teachers-paid-up-to-170000-on-retirement-243489.html

and these are from 2014..............

http://www.irishexaminer.com/ireland/five-teachers-net-over-150k-each-in-pension-payouts-278915.html

TheDriver

Geuze is right, one principal on max years with lots of qualifications in charge of big school got 177, not 200k. Most teachers will get lump sum about 100k or less and pension,is half final salary so investment would be prudent. I know a lot of retired teachers in recent years and not one invested in property......

The_Conductor

who_ru wrote: »

I wonder how many of the cash buyers are retiring public servants with massive lump sums.

I read somewhere recently that some teachers were walking away with 200k in their pocket. Dirt at 41%, low interest rates for deposits also. Making property an attractive investment. FG/LAB working hard to ensure the already well off become wealthier. Young people in this country are on a hiding to nothing.

Oh and it just so happens that the Govt are now talking of reversing public sector pay cuts. Is there an election due in the next 2 years? Shows what this Govt priorities are.

Very few actually. The average salary in the public sector is 38,500. Retirement lumpsums are 1.5 times gross annual earnings- which would put the average lumpsum @ under 60k.

Teachers have a salary scale which tops out @ just under 60k after 25 years service. An ordinary teacher (aka not a principle) would qualify for a lumpsum for just under 90k. A principle of a large school could potentially earn up to an additional 42k in allowances, which are reckonable for pension purposes- bringing their gross pensionable pay to over 100k- and their lumpsum to 150k

Senior lectures (heads of Departments in the Universities) have an 8 point salary scale which tops out @ 104k (Senior Lecturer grade 3).

These are gross amounts- and while they look good- keep in mind the average salary of 38k- and all the recent recruits on 21k.

The problem in Dublin- is not public servants retiring on +200k lumpsums (of those who have- most of them are politicians- and not your teachers, gardai, nurses, prison officers or civil servants)- its the fact that there are another 12-14,000 people per annum coming to live in Dublin- and there has been for years- and we've actually removed over 20,000 properties from the rental market- most recently by outlawing bedsits without providing any alternate accommodation onto the market.

All of this is not news- the minister for housing Jan O'Sullivan- will start harping on about 'Our 20-20 strategy to review housing needs for the Dublin region' whenever it comes up........ Ffs- a 2020 housing strategy? Aka- we'll boot the issue down the road- and it'll be the next government's problem.

At the moment- political inactivity is being shielded by the ritual sacrificing of scapegoats. The perenial scapegoats are public sector employees, bankers and estate agents (in turn- depending on which group are seen as most vunerable to criticism at any particular point in time).

Irish people have not gotten used to higher density housing units.
Dublin has unrealistic limitations on high rise that has no cognisance of needs.
Where apartment complexes have been built in the past- they have been poorly serviced, badly maintained, lack access to basic facilities and amenties, and contribute to the mindset about how everyone should aspire to own their own little semi-d in south dublin with their own front and back garden.

At the root of all of this is the Irish mindset- and a complete lack of any attempt to win people around to living in higher density developments. Thereafter- suitable sites to build on in the Dublin area are in finite supply- and there is nothing to stop developers (including NAMA) from sitting on potential development sites.
Next- is the lack of finance to the construction sector and the SME sector in general (despite what you hear the banks saying- they are not lending to these sectors, period).
Finally- you have a significant portion of the pre-existing population of the Dublin area competing with you for any desireable properties- as they have been lifted out of negative equity and find themselves able to sell- many are doing just that- with the intention of buying ye semi-detached with its front and rear garden in south county dublin.........

Its a maelstrom- and there is a complete lack of any urgency or indeed policy- to address the myriad of intertwined issues that are conspiring to prop up this cycle.

No one resolution is going to solve the mess- a comprehensive programme tackling the causes and the symptoms of the lack of accommodation- has to be rolled out.

At the moment- we're pointing at 2 pensioners who've been made homeless in an affluent area of Dublin- and tut tutting- about how shocking it is- instead of looking at the 22 year old single mother sleeping on a cardboard box outside the Merchants Quay project- because she doesn't feel safe with her daughter in any of the approved hostels..........

Victorian Dublin had a safety valve- the tenements- which were awful and rightfully condemned to history. Unfortunately- modern Dublin is staggering back towards its historical past- through protracted inactivity and lack of will, on the part of government to knock heads together..........

gaius c

desertcircus wrote: »

23% rises in one year is madness and utterly unsustainable. If that rate remains constant, Dublin would be back to full peak prices before Christmas 2016 - except without tracker mortgages, 100% mortgages, or half the banks.

Quick correction on your maths. If something has a 50% fall in value, it needs a 100% rise to get back where it was before.

gaius c

who_ru wrote: »

I wonder how many of the cash buyers are retiring public servants with massive lump sums.

I read somewhere recently that some teachers were walking away with 200k in their pocket. Dirt at 41%, low interest rates for deposits also. Making property an attractive investment. FG/LAB working hard to ensure the already well off become wealthier. Young people in this country are on a hiding to nothing.

Oh and it just so happens that the Govt are now talking of reversing public sector pay cuts. Is there an election due in the next 2 years? Shows what this Govt priorities are.

Sold an apartment in Cork at the start of the year and the bidding was two public sector retirees going at it hammer & tongs with their lump sum. Didn't want to put the money in the bank because yield is so low and the Cyprus bail-in is in the back of their minds.

Sample of one but we were happy enough with that outcome. A buddy trying to buy in Dublin around the same time was on the other end of the stick.

gaius c

Villa05 wrote: »

No need to look for an external shock. check out the core stats for the under 35's. unemployment, emigration, pay scales. Hell even many of those with jobs are choosing to leave. This country has thrown them to the wolves to protect their own asses. shamefull and not without consequences

There's also less of them. But I guess we have huge demand because new born babies are going to take up the mantle and buy all our over-priced houses.

lima

gaius c wrote: »

Sold an apartment in Cork at the start of the year and the bidding was two public sector retirees going at it hammer & tongs with their lump sum. Didn't want to put the money in the bank because yield is so low and the Cyprus bail-in is in the back of their minds.

Sample of one but we were happy enough with that outcome. A buddy trying to buy in Dublin around the same time was on the other end of the stick.

Yeah every viewing I go to for Apartments in Dublin is just rich middle class couples in their 60's looking to protect their massive cash piles. The people who actually need these apartments cannot buy them because of these old people. It's wrong.

El_Dangeroso

lima wrote: »

Yeah every viewing I go to for Apartments in Dublin is just rich middle class couples in their 60's looking to protect their massive cash piles. The people who actually need these apartments cannot buy them because of these old people. It's wrong.

Went to a property auction a couple months ago (not to buy just more to have a nosy at what went on)

There were two other couples our age in the room, the rest was all white haired people scrambling to get their hands on anything.

I do wonder if the removal of the cgt exemption at the end of the year is going to have any effect at all on these people? I'm beginning to think not.

Thatislegal

For me the question is what is the main factor driving price rises? Cash, we know that since the bottom, over half of all sales were cash. Who has 200/300k cash? Not the shafted 20/30 something generation, that's for sure. Why is the cash coming in to the market? No where else to go.

So the questions are, would the market get to where it is without the cash buyer driving it? Hard to tell. There seems to be supply issues alright. One has to ask though, would the supply issues be enough to drive the market this high? I suspect not.

What would drive the market in the absence of the cash buyer? Credit. What is credit based on? Income and employment. Real wages are stagnant and young people aren't as debt hungry (aka stupid) as in 2007. Most property buys at the moment don't make sense from an investment point of view, Dirt free post office bonds offer a better return than most property, once one deducts property appreciation. Of course there's a real risk of depreciation too.

My guess is we'll see a tapering in rises as the end of the Noonan tax sweetie expires, perhaps even a fall early next year. Though in the medium term supply is still an issue and perhaps more of an issue is political interference. Watch out for 'Help to Buy' scheme. That could screw the market totally. Don't let it be spun to you as a good thing. E-mail your local TD, it won't take long. Come out hard against it. One must watch out for attempts to shamelessly transfer yet more wealth from the young to the old.

On a positive note if we do see large drops in prices by early next year, these cash buyers will have done a lot of the Negative equity generation and citizens a favour. As unlike the last bubble this one has been paid for up front.

L1011

If cash buyers were all investors, there would be far more rental properties coming to market. There aren't.

Bigcheeze

Interesting chart from the Economist. Ireland not on a great trajectory but not currently overvalued. https://twitter.com/theeconomist/status/506124618491760640

gaius c

Bigcheeze wrote: »

Interesting chart from the Economist. Ireland not on a great trajectory but not currently overvalued. https://twitter.com/theeconomist/status/506124618491760640

Did you note the *?
"Relative to long term average" it says. If that "long term" is anything less than 20 years, it's worthless.

Thatislegal

Fair point, but they don't need to be investors to bid up prices, but even if they are, why would we need to see more rental properties go to market? A lot of sales have existing tenants that simply change their standing orders from one landlord to another.

No doubt there's a supply issue. No doubt there's a lot of cash buyers chasing the few properties out there.. The question is what is the dominant factor? In other words, how much of that supply issue is now priced in?

My guess is, these guys with cash (50% of sales since the bottom of the market), whether trying to take advantage of Noonans tax break sweetie or not, have bid the market in excess of what's reasonable. Why, because they can, there's no limit on how wasteful one is with one's cash. Remember, we're not talking about rocket scientists or professional investors here. Why in excess of reasonable? Well, in credit affordability terms, house buying is now as expensive as in the 'boom'. Wages are stagnate, unemployment is incredibly high, employment T&C for the shafted generation are terrible and the demand for credit, though up, is still really poor. All reflected in the declining birth rate.

In addition, yields on rental properties are now weak and on 3 beds, non existent. Couple that with the rise of Sinn Fein and threat to all those tax write offs landlords can make, I wouldn't/won't be getting involved. IMO one would be better off putting a lump sum in a Dirt free post office scheme than rolling the dice on this dysfunctional market.

My guess is increases will taper by years end, start of 2015 as tax break expires and the market becomes more credit driven, then it should decline some. Maybe 20%. Then again the market could 'go up like a rocket' from here. Which would be sad to see, one housing bubble a generation is definitely enough, two would be just depressing.

The_Conductor

MYOB wrote: »

If cash buyers were all investors, there would be far more rental properties coming to market. There aren't.

Most reports are now stating that investors have fallen to between 15 and 20% of the market for properties- current market rents do not support property as a viable investment (despite rents being close to all-time-highs.....).

The First-Time-Buyer- is now the largest market segment- however closely followed by current home owners- both on over 40% of the market.

At very least in the Dublin regional market- it would appear that current property owners are selling again- in order to purchase alternate properties- with first time buyers providing a viable outlet for apartments and other properties that current owners wish to divest. Even with this- there is still a significant shortage of these high density units- hence their continued increases in prices- however, many of today's first-time-buyers are spurning these properties- and going head-to-head with other purchasers for ye semi detached with front and back garden.........

Some interesting comments from Jan O'Sullivan in yesterday's IT- looks like the stupor of the 2020 strategy may be awakening..........

MouseTail

Do you have a link Conductor? I am a fan of the Strategy but its not Jan OSullivans remit any more.

mr_seer

The_Conductor wrote: »

Most reports are now stating that investors have fallen to between 15 and 20% of the market for properties- current market rents do not support property as a viable investment (despite rents being close to all-time-highs.....).

The First-Time-Buyer- is now the largest market segment- however closely followed by current home owners- both on over 40% of the market.

At very least in the Dublin regional market- it would appear that current property owners are selling again- in order to purchase alternate properties- with first time buyers providing a viable outlet for apartments and other properties that current owners wish to divest. Even with this- there is still a significant shortage of these high density units- hence their continued increases in prices- however, many of today's first-time-buyers are spurning these properties- and going head-to-head with other purchasers for ye semi detached with front and back garden.........

Some interesting comments from Jan O'Sullivan in yesterday's IT- looks like the stupor of the 2020 strategy may be awakening..........

Conductor, I think the part about the % of cash buyers is incorrect. It appears that you are referring to a survey by the Chartered Surveyors Institute however if you correlate the number of properties financed by mortgages versus the number of sales in Dublin in H1 2014 you will find that they still make up less than 50%. This suggests that c. 50% of the market is still transacting in cash only

The_Conductor

MouseTail wrote: »

Do you have a link Conductor? I am a fan of the Strategy but its not Jan OSullivans remit any more.

Will try to see if I can find it (I don't have an Irish Times account anymore).