The Daft.ie House Price Report. An analysis of recent trends in the Irish residential sales market 2013 Q3

Transcription

1 The Daft.ie House Price Report A aalysis of recet treds i the Irish residetial sales market 213 Q3 Itroductio by Roa Lyos, Assistat Professor at Triity College Dubli ad Ecoomist at Daft.ie

2 Itroductio Roa Lyos, Ecoomist, Daft.ie Supply shortages, ot a ew bubble, the cocer i Dubli Roa Lyos is a ecoomic researcher based at Balliol College, Oxford, where he lectures ad is udertakig his doctorate i urba ecoomics. He is also Ecoomist with Daft.ie As we eter the fial quarter of 213, the sigals emergig from the housig market have totally chaged compared to two years ago. The, it seemed there was o ed to falls i house prices, particularly i Dubli, which at that poit had see askig prices fall 55% from the peak compared to 48% elsewhere. Now however, eve as askig prices cotiue to fall outside the capital, ad at double-digit rates i Muster, there are cocers about a ew bubble emergig i Dubli. Such cocers are probably overstated ultimately bubbles ca oly emerge with loose credit, ad there are few who would argue that the housig market i Dubli is cursed with easy moey. Istead, what we are witessig is somethig like the lacig of a boil. For almost five years, a sigificat chuk of would-be first-time buyers based i Dubli held off makig a purchase, ejoyig ot oly fallig prices while they did but fallig rets for the early years also. Ad they saved. The, probably due to a combiatio of the ed of mortgage iterest relief, risig rets ad startig their ow families, they started to buy. But this backlog of buyers is ot limitless. They are two-job couples, workig i FDI sectors or related professioal services. They have secure icomes ad are, for the wat of a better word, the darligs of the mortgage market curretly. It is this backlog that we are curretly witessig drivig i the market. Ad markets beig markets, there is probably a elemet of mometum emergig, with other trasactios occurrig as people get caught up i the rush. The problem for policymakers therefore is ot aother bubble it s a scarcity of houses i areas where people wat to set up homes. It does ot take a ecoomist to poit out that jobs are scarce curretly ad what jobs are beig created at the momet are beig created disproportioately i Irelad s cities, particularly i Dubli. This is shiftig demad towards the capital. Six moths ago, my commetary to the Q1 Report preseted figures for the average fourbedroom detached house ad oe-bedroom apartmet i South Couty Dubli ad i Mayo. I metioed at the time that the ratio of prices betwee the two areas would be a good sigal of pressures i the market. The ratio for both properties is show i the graph (overleaf). The tred over the last six moths is every bit as dramatic as what preceded it: f prices ca act as a warig sigal, this is the alarm bell rigig. 2 The Daft.ie House Price Report 213 Q3 Cotiued o ext page >

3 Itroductio Roa Lyos, Ecoomist, Daft.ie Supply shortages, ot a ew bubble, the cocer i Dubli Itricately tied up with the shift i prices towards Dubli is the issue of supply. Not oly has Dubli almost o backlog from the bubble years, it is also buildig ext to o ew homes. A city of almost half a millio households is buildig oly slightly more tha 1, uits a year. This is probably oe teth of the umber of ew homes it eeds: available figures suggest that there are about 1, first-time mothers i Dubli each year. Bizarrely, whe the topic of ew supply is raised, a commo respose is: We do t wat aother bubble. The whole poit about brigig ew supply of homes is to prevet prices from risig to uaffordable levels, ot cause it. As metioed above, supply of credit icreases house prices; supply of dwelligs lowers them. The fidigs from this report are stark. For the first time sice 27, each of the six regios of Dubli covered i the Daft.ie Report ow shows askig prices risig i year-o-year terms. Every sigle other regio i the coutry shows them still fallig. While year-o-year iflatio i the capital will ease over the ext 6 moths, as the last quarters of fallig prices fall out of the equatio, this should ot be take as the problem goig away. Ultimately, housig ear cetres of employmet eeds to be affordable. This souds like a tall order for Govermet, somethig perhaps impossible to get right through tikerig with the market. Policymakig is as much about diagosis as aythig else. Thus, for policymakers, a logical place to start addressig this issue is establishig why builders are curretly ot buildig. 4. Ratio of prices i South Couty Dubli to Mayo bed detached 1-bed apartmet 3 The Daft.ie House Price Report 213 Q3

4 Year-o-year chage i askig prices, Q3 213 Mayo 12,327 Chage: -9.3% Roscommo 94,378 Chage: -11.7% Galway City 158,634 Chage: -3.1% Clare 133,129 Chage: -8.5% Kerry 146,783 Chage: -7.% Sligo 117,249 Chage: -1.7% Galway Limerick City 131,364 Chage: -1.3% Doegal 118,172 Chage: -9.8% 13,153 Chage: -1.4% Limerick 143,669 Chage: -6.7% Leitrim 88,874 Chage: -12.1% Logford 19,845 Chage: -5.7% 128,549 Chage: -9.9% Offaly 123,864 Chage: -7.2% Tipperary Westmeath 133,596 Chage: -7.% Waterford 154,551 Chage: -5.9% Cava 11,34 Chage: -11.9% Laois 86,225 Chage: -19.5% Kilkey 139,751 Chage: -3.9% Moagha 128,282 Chage: -9.9% Meath 165,933 Chage: -3.9% Waterford City 18,475 Chage: -4.9% Louth 152,513 Chage: -5.4% Kildare 174,975 Chage: -3.4% Wicklow 221,631 Chage: -3.5% Carlow 117,966 Chage: -15.6% Wexford 127,111 Chage: -6.9% Cork 154,774 Chage: -5.3% Cork City 165,884 Chage: -4.5% Dubli Close-up North Dubli Couty 21,765 Chage: 1.4% North Dubli City 225,256 Chage: 5.2% West Dubli Couty 17,148 Chage: 3.4% Dubli City Cetre 195,777 Chage: 9.5% 4 The Daft.ie House Price Report 213 Q3 South Dubli Couty 37,65 Chage: 12.7% South Dubli City 251,228 Chage: 8.7%

5 Daft.ie Askig Price Idex -1.5% Askig prices were 1.5% lower i the third quarter of 213 tha a year previously, the closest to stable askig prices sice sice 27. The average askig price atiowide is ow 17,4, compared to 378, at the peak i 27. Askig Prices, Residetial Sales (212 average = 1) Jauary February March April May Jue July August September October November December Dubli askig prices rise 7.7% i 12 moths This is the third quarter i a row that Dubli askig prices has rise i year-o-year terms, with the 7.7% recorded the strogest growth sice early 27. Prices outside Dubli dow 6.7% i year-o-year terms Outside the capital, askig prices cotiued to fall, although the declie of 6.7% was the smallest sice mid-28. Stock sittig o the market dow 19% i a year The total umber of properties sittig o the market fell from just uder 5, i mid-212 to just over 4, i mid-213, the secod successive year where it s falle by 1, Stock of properties o Daft.ie (start of moth) ad flow of properties, Nearly oe half of properties sell withi four moths The proportio of properties fidig a buyer withi four moths has rise from 37% a year ago to 45% ow II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II Stock Flow 2 The Daft.ie Askig Price Idex is based o askig prices for properties posted for sale o Daft.ie. A idex based o askig price, as opposed to closig price, is a measure of sellers expectatios. Figures are calculated from ecoometric regressios, which calculate chages i price that are idepedet of chages i observable measures of quality, such as locatio, or bedroom umber. 65 The Daft.ie House Price Report 213 Q3

6 Daft.ie Price Register Idex 1.9% For the first time sice the lauch of the Property Price Register, there was a year-o-year icrease i the average trasactio prices - of 1.9%. The average trasactio price atiowide durig the third quarter was 156,. Trasactio Prices, Residetial Sales (212 average = 1) Jauary February March April May Jue July August September October November December Price register poits to icreasig prices i city areas I both Dubli (1.4%) ad other cities (4.1% o average), trasactio prices are higher tha a year ago. I Muster, prices cotiue to fall sharply I Muster i particular, however, prices are still fallig, dow 11.8% compared to the same period last year. Secod-quarter trasactios up 13% There were almost 6, trasactios i the secod quarter of 213, compared to just over 5,2 a year previously. Number of housig market trasactios, Source: propertypriceregister.ie 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Q Q Q Q Q Q Q Q3 213 The Daft.ie Price Register Idex is based o prices for residetial properties recorded o propertypriceregister.ie, for which matches were foud i the daft. ie archives. Because these are etered with a lag by solicitors, figures for previous quarters are subject to revisio. Figures are calculated from ecoometric regressios, which calculate chages i price that are idepedet of chages i observable measures of quality, such as locatio, type, or size. 6 The Daft.ie House Price Report 213 Q3

7 Daft.ie Sapshot of Askig Prices Natiowide What ca I ask for? Ca I afford it? Average house prices across Irelad ( s), by couty ad property type, 213 Q3 Daft.ie Sapshot of Askig Prices Natiowide 1-bed apartmet 2-bed terraced 3-bed semi-d 4-bed bugalow 5-bed detached Dubli Dubli City Cetre North Dubli City South Dubli City North Co. Dubli South Co. Dubli West Dubli Other Cities Cork City Galway City Limerick City Waterford City Leister Meath Kildare Wicklow Louth Laois Westmeath Offaly Logford Carlow Kilkey Wexford Muster Waterford couty Kerry Cork couty Clare Limerick couty Tipperary Coaught Galway couty Mayo Roscommo Sligo Leitrim Ulster Doegal Cava Moagha The Daft.ie House Price Report 213 Q3

8 Dubli Treds A aalysis of recet treds i the Dubli residetial sales market 8, 7, 6, 5, 4, How have house prices chaged? Average house price by area, West Couty Dubli Average price: 17,148 Year o year chage: 3.4% From peak: -55.4% North Couty Dubli Average price: 21,765 Year o year chage: 1.4% From peak: -51.9% North Dubli City Average price: 225,256 Year o year chage: 5.2% From peak: -53.8% Dubli City Cetre Average price: 195,777 Year o year chage: 9.5% From peak: -54.4% 3, 2, 1, South Couty Dubli Average price: 37,65 Year o year chage: 12.7% From peak: -48.% South Dubli City Average price: 251,228 Year o year chage: 8.7% From peak: -52.9% 26 II III IV 27 II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Dubli City Cetre North Dubli City South Dubli City North Couty Dubli South Couty Dubli West Couty Dubli How may properties are o the market? Number of properties o the market ad ewly advertised, For the first time sice early 27, askig prices rose aually i all six regios of Dubli. The rate of price rises is greatest i South Couty Dubli, where the average askig price is 13% higher tha a year ago % 6% 5% 4% 3% 2% 1% % 27 II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Stock (LHS) Iflow (RHS) % of properties sold or sale agreed How fast are properties sellig? Proportio of properties marked as sale agreed ad withdraw, Withi 2 mths Withi 4 mths Withi 6 mths Two-thirds of Dubli properties fid a buyer withi four moths, up from 56% a year ago. Stock for sale i Dubli has stabilised sice the start of the year, with 6 properties were listed for sale i the first 8 moths of 213, up almost 25% from 4,7 i 212. Oe year ago Previous quarter Curret quarter 8 The Daft.ie House Price Report 213 Q3

9 Leister Treds A aalysis of recet treds i the Leister residetial sales market 5, 45, 4, How have house prices chaged? Average house price by area, Logford Average price: 19,845 Year o year chage: -5.7% From peak: -61.2% Westmeath Average price: 128,549 Year o year chage: -9.9% From peak: -59.2% Kildare Average price: 174,975 Year o year chage: -3.4% From peak: -55.8% Louth Average price: 152,513 Year o year chage: -5.4% From peak: -6.1% Meath Average price: 165,933 Year o year chage: -3.9% From peak: -57.8% 35, 3, Offaly Average price: 123,864 Year o year chage: -7.2% From peak: -58.2% Wicklow Average price: 221,631 Year o year chage: -3.5% From peak: -54.7% 25, 2, 15, Laois Average price: 86,225 Year o year chage: -19.5% From peak: -64.6% Wexford Average price: 127,111 Year o year chage: -6.9% From peak: -6.8% 1, 5, Kilkey Average price: 139,751 Year o year chage: -3.9% From peak: -56.5% Carlow Average price: 117,966 Year o year chage: -15.6% From peak: -56.8% 26 II III IV 27 II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Dubli Commuter Couties West Leister South-East Leister 2 18 How may properties are o the market? Number of properties o the market ad ewly advertised, For much of Dubli s commuter belt, askig prices are 4% lower tha a year ago, the closest to stable they have bee sice I certai parts of Leister, however, such as Laois ad Carlow, prices are still fallig rapidly II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Stock (LHS) Iflow (RHS) Just uder half (47%) of Leister properties fid a buyer withi four moths, compared to 41% a year ago. The total umber of properties for sale i Leister i September was 1,, dow from 12,6 a year ago. 5% 45% 4% 35% 3% 25% 2% 15% 1% 5% % % of properties sold or sale agreed How fast are properties sellig? Proportio of properties marked as sale agreed ad withdraw, Withi 2 mths Withi 4 mths Withi 6 mths Oe year ago Previous quarter Curret quarter 9 The Daft.ie House Price Report 213 Q3

10 Muster Treds A aalysis of recet treds i the Leister residetial sales market 4, 35, 3, 25, 2, 15, 1, 5, How have house prices chaged? Average house price by area, II III IV 27 II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Cork City Limerick City Waterford City Rest-of-Muster How may properties are o the market? Number of properties o the market ad ewly advertised, II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Stock (LHS) Iflow (RHS) Clare Average price: 133,129 Year o year chage: -8.5% From peak: -57.% Limerick Couty Average price: 143,669 Year o year chage: -6.7% From peak: -49.6% Kerry Average price: 146,783 Year o year chage: -7.% From peak: -52.4% Cork Couty Average price: 154,774 Year o year chage: -5.3% From peak: -56.9% Cork City Average price: 165,884 Year o year chage: -4.5% From peak: -55.8% Tipperary Average price: 133,596 Year o year chage: -7.% From peak: -52.% Limerick City Average price: 131,364 Year o year chage: -1.3% From peak: -5.5% Waterford Couty Average price: 154,551 Year o year chage: -5.9% From peak: -55.5% Waterford City Average price: 18,475 Year o year chage: -4.9% From peak: -61.3% I Cork ad Waterford cities, prices have falle by 5% o average i the last 12 moths, while i Limerick the fall has bee 1%. Across Muster outside the cities, askig prices cotiue to fall, by typically 7% i the last year. Just uder oe third (31%) of Muster properties fid a buyer withi four moths, compared to 23% a year ago. The total umber of properties available for sale i Muster i September was 12,6, dow from 15, a year ago. 45% 4% 35% 3% 25% 2% 15% 1% 5% % % of properties sold or sale agreed How fast are properties sellig? Proportio of properties marked as sale agreed ad withdraw, Withi 2 mths Withi 4 mths Withi 6 mths Oe year ago Previous quarter Curret quarter 1 The Daft.ie House Price Report 213 Q3

11 Coacht & Ulster Treds A aalysis of recet treds i the Leister residetial sales market 4, How have house prices chaged? Average house price by area, Sligo Average price: 117,249 Year o year chage: -1.7% From peak: -58.6% Doegal Average price: 118,172 Year o year chage: -9.8% From peak: -56.1% Leitrim Average price: 88,874 Year o year chage: -12.1% From peak: -64.6% 35, 3, Mayo Average price: 12,327 Year o year chage: -9.3% From peak: -54.4% Moagha Average price: 128,282 Year o year chage: -9.9% From peak: -6.1% 25, 2, 15, 1, Galway Average price: 13,153 Year o year chage: -1.4% From peak: -59.7% Galway City Average price: 158,634 Year o year chage: -3.1% From peak: -58.1% Cava Average price: 11,34 Year o year chage: -11.9% From peak: -61.9% Roscommo Average price: 94,378 Year o year chage: -11.7% From peak: -62.4% 5, 26 II III IV 27 II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Galway Couty Coacht Ulster I Galway city, prices cotiue to fall but at a slow rate, 3% i year-o-year terms How may properties are o the market? Number of properties o the market ad ewly advertised, Elsewhere i Coacht-Ulster, askig prices are typically 1% lower tha a year ago. Just uder oe third (3%) of Coacht-Ulster properties fid a buyer withi four moths, compared to 25% a year ago. The total umber of properties sittig o the market i Coacht-Ulster i September was 11,7, dow from 14,7 a year ago II III IV 28 II III IV 29 II III IV 21 II III IV 211 II III IV 212 II III IV 213 II III Stock (LHS) Iflow (RHS) 4% How fast are properties sellig? Proportio of properties marked as sale agreed ad withdraw, % 3% 25% 2% 15% 1% 5% % Withi 2 mths Withi 4 mths Withi 6 mths Oe year ago Previous quarter Curret quarter 11 The Daft.ie House Price Report 213 Q3

12 About the Report Over the last 1 years, Daft.ie has collected a vast amout of data o the Irish property market. I 211 aloe, over 1, properties for sale were advertised o the site. About Daft.ie Daft.ie is Irelad s largest property website. The latest audited report from ABC (Sep 211) shows mothly traffic of 13 millio page impressios (pages of iformatio received) ad millio uique users per moth across Daft Media s property websites (daft.ie, ret.ie, let.ie, property.ie). This makes Daft.ie the biggest property website i Irelad across all demographics. About the Report The goal of the Daft Report is to use this iformatio to help all actors i the property market make iformed decisios about buyig ad sellig. I additio, because it is freely available, the Daft Report ca help iform the media, the geeral public ad policymakers about the latest developmets i the property market. This is the Daft.ie House Price Report, the parter to the Daft.ie Retal Report, which will be issued ext moth. Together, they give house-huters ad ivestors more iformatio to help them make their decisios. These twi reports mea that Daft is the oly objective moitor of treds i both retal ad sales markets o a quarterly basis, makig the report a essetial barometer for ayoe with a iterest i the Irish property market. The Daft Report is ow almost te years old ad has become the defiitive barometer of the Irish residetial property market. It is beig used by the Cetral Bak, mortgage istitutios, ad by fiacial aalysts at home ad abroad, as well as by the geeral public. Methodology ad Sample Size The statistics are based o properties advertised o Daft.ie for a give period. The regressios used are hedoic price regressios, accoutig for all available ad measurable attributes of properties ad oly coefficiets with a very high degree of statistical sigificace (p <.1) are used. The average quarterly sample size for sales over the period was over 34,. Idices are based o stadard methods, holdig the mix of characteristics costat, with the aual average of 27 used as the base. A workig paper o the methodologies employed i both retal ad sales markets will be published o the Daft.ie website soo. Stock ad flow statistics are calculated usig cosistet series for the period covered. 12 The Daft.ie House Price Report 213 Q3

13 Disclaimer The Daft.ie Report is prepared from iformatio that we believe is collated with care, but we do ot make ay statemet as to its accuracy or completeess. We reserve the right to vary our methodology ad to edit or discotiue the idices, sapshots or aalysis at ay time for regulatory or other reasos. Persos seekig to place reliace o ay iformatio cotaied i this report for their ow or third party commercial purposes do so at their ow risk. Comig Next The Daft.ie Retal Report 213 Q3, i November 213 The Daft.ie Retal Report will be published i November ad will iclude a review of the performace of Irelad s retal market i mid-213, plus all the usual idices, sapshots, treds ad retal yield aalysis, providig aalysts, teats, ladlords ad the public with the most up-to-date iformatio o Irelad s retal market. Credits Ecoomic Aalysis: Roa Lyos Layout ad Desig: Ciara Mulvay Data Compilatio: Paul Coroy Marketig: Kiera Harte All data is Copyright Daft Media Limited. The iformatio cotaied i this report may oly be reproduced if the source is clearly credited. Please cotact Daft.ie o for further iformatio.