Over the period from the 10th of December to the 15th of December there were 258 price drops and the average drops was 5.9%.
8,817 properties listed in Daft have now dropped the price at least once (almost 20% of the properties currently listed)
This report is only available in excel format
Analysis is provided by
Time on the Market
The length of time properties remain on the market has increase significantly over the last 3 weeks.
On average properties have been on the market for 124 days are remain unsold
Sligo has shot to the top of the list where properties on now on the market for an average of 146 days.
Time on the Market Report is available in html.
Almost 30% of properties listed on Daft have now been for sale for more than 6 months.
Analysis by Time on the Market is available in html.
December 20, 2007 at 11:44 am
Today’s Irish Times reports that :
The ESRI has also reiterated its belief that, when final data is available, average house prices in December 2007 will be shown to be 15 per cent lower than a year earlier.
December 20, 2007 at 12:06 pm
Do you have a link to the article?
December 20, 2007 at 2:54 pm
I have two personal friends, each of them hold senior positions at well known leading estate agent firms. They have both alleged the year end price drops will definitely be 15 – 22% depending on region and so on. They are also revising their projections for 2008 and expecting more severe price drops in 2008.
Their arguments: unsold housing stocks will swell as more and more sellers attempt to sell their houses, resulting in the fundamental numbers almost mirroring a semi property crash and not the so called soft landing story being protrayed by certain quarters.
Personally I’m in the market for > €650k range and cash ready but there is no way I am buying some elses problem in 2008. Prices need to drop at least 25 – 30% before I’ll be investing in this market.
I am still noticing vendors and estate agents attempting to hook a buyer with say a 10 – 15% price drop from where the properties were priced before the bang. It just ain’t going to happen. People need to get real.
Colleagues at my practice moving their property investment opportunities overseas where yields are extremely healthy and volatility is low. The Irish property market is screwed up and it has been for a while, it is the sub-prime problem and inflationary pressures which have brought the magnitude of the problem to the masses!
December 20, 2007 at 3:55 pm
Interesting views on here. Incidentally, Moody’s have just published a terrific US market report entitled “Aftershock: Housing in the Wake of the Mortgage Meltdown”
Here is an excerpt about the US property market. Whilst the inputs driving the US crisis are a different set of issues to those being experienced in Ireland, nevertheless there are some common problems affecting both US and Ireland and the UK markets. Here is the excerpt:
“Awash in Inventory
The housing market’s most fundamental problem is it is awash in unsold inventory. According to the Census Bureau, as of the third quarter of 2007 there was close to 2.1 million vacant unsold homes that were for sale, equal to 2.6% of the stock of owner-occupied homes. Even a well-functioning housing market has a substantial amount of inventory. But in the quarter-century between the early 1980s and mid-2000s, the vacancy rate was an unwavering near 1.7%. The difference between the current over 2.6% vacancy rate and the 1.7% rate that consistently prevailed prior to the recent boom provides a good estimate of the amount of excess inventory in the market—it currently totals nearly 750,000 homes (see Chart 1-4). This is far and away the highest level of excess inventory in the post-World War II period.”
December 20, 2007 at 6:11 pm
Here is the link to the Irish Times article mentioned above:
http://www.ireland.com/newspaper/frontpage/2007/1220/1197997070745.html
December 21, 2007 at 11:50 am
Anonymous,
WhIle I would agree with you that prices will continue to fall next year and probably the year after as it may take that long for reality to sink in to Irish people about the real value of propety and not the rubbish that has been spread over the last number of years.
I have to say I disagree with you about it being the sub prime problem, that is only one issue as sub prime simply made it harder for banks to borrow from other banks as their is no trust between them as not all of them have been honest about their exposure to sub prime and attempts are now being made by the ECB and central banks to alleviate this problem and free up the market by releasing funds into the market.
Another cause is is lack of due diligence on the part of banks and their lending practice, in order to make bigger profits at the expense of first time buyers etc they invented more and more ways of lending more money to people who could ill afford it in a boom and definitely cant in a bust.
Also driving up of the market by greedy developers looking for more and more money and eventually trying to pass off “s**t as chic”,
Comments by stupid politicians such as ” if you dont get on the ladder now you may miss your opportunity” these are the same politicians being questioned by a tribunal in relation to their finances and if they were in other countries would be in jail.
Estate agents driving up prices and scare mongering with the end result that a lot of people bought out of fear and will be in negative equity and debt for the next 40 years.
All of the above leading to increases in house prices so exhorbitent the the only thing that can happen is a crash and the sooner it happens the sooner it will be over and normal service will be resumed. Hopefully then we will be minus a political party or two that led us here to a country that has about €2,000,000,000 of debt.
So to blame the sub prime debacle is bull you need to look closer to home a lot closer for the real reasons not just the slurry spread by vested interests trying to cover their misdemeanours as they normally do by blameing somebody else.
December 27, 2007 at 12:05 pm
I am a small time property investor – I have 3 modest semi-D’s rented out in the greater Dublin area, all are on the northside. I had one of the houses on the market when our former Minister for Justice dropped a bomb and began speculating about stamp duty and so on. Overnight I lost 2 potential buyers who were bidding against one another. My estate agent suggested buyers were waiting for stamp duty reductions. That was over a year ago now. The latest budget was not enough to bring buyers back into the market. My properties were for my retirement fund and to help my six children out in life. But now that former Ministers comments along with Cowens ineffective stamp duty adjustment along with the external impacts of the US sub prime credit crunch pressures and now inflation have all hit me hard and it is getting worse. I can’t foresee property price decreases easing up at all, in fact in discussions with my accountant, I think the problem will be much bigger. If I were to sell now (assuming I got a buyer) then I would need to sell each of the houses at about a 20-25% drop, maybe as much as 30% just to release my accumulated equity as quickly as possible. Its a sad state of affairs.
December 27, 2007 at 12:38 pm
Actually Edgar your investment abilities are a sad state of affairs.
Have you even bothered to educate yourself about investment before plunging into property? How have you hedged against a property crash?
You are not alone. The vast majority of people who invest have no experience and don´t bother trying to educate themsleves.
Typically when a person is near to retirement they move from their risky investments into bonds and cash. From what you are saying you seem to be in the middle of a housing crash when you will have to cash in your invesments. You will take a hit. There is no doubt about that. What you now have to decide is will I accept this circa 25% hit and consider myself lucky that I haven´t lost more. Or will I, as the amature does, hang on for the market to recover.
Successful and professional investors hedge against a loss in their investments. You can do this by finding something that does not have a gain-loss pattern corresponding to your original investment. Buy enough of the hedgeworthy securities to offset losses you may incurr.
If you have time, read some books on investment.
As for blaming politicians on your losses. You may just as well blame the weather. Both of these things are out of your control and if you intend relying on them then you and your money will certainly soon part. Looking at the market long term, spreading your risk and hedging are the only ways to invest without being surprised by a loss.
You are looking to dip into the investments every so often for you kids so you are not thinking long term.
You have invested solely in housing and therefore have not spread your risk.
And you don´t seem to have hedged at all.
December 27, 2007 at 12:53 pm
I agree with “All Irish politicians are corrupt” – it is foolish to blame politicians for this crash. It is the nature of the beast that after such a run up – a bubble – there will inevitably be a crash.
It has happened the world over in many other markets from the tulip bulb bubble way back in the 1670s to the Japanese property market in the early 1990s. Things simply do not keep going up in price at such a pace without crashing back down again when everyone realizes that the party is over. Many people in Ireland kept saying “oh it can’t happen here because of…” and then repeating some platitude or other that had been fed to them by the vested interests. Look at the enormous amount of inventory that was allowed to develop. Where was the money – or the buyers- to come from once the speculators left the market?
December 27, 2007 at 9:00 pm
Keep up the good work IPW. Good to get the daft data. It might slow for the next few weeks as I would think there is not much point in dropping your asking price until after the New Year.
I am still amazed at the narrow minds at myhome.ie. They don’t seem to get the fact that people will always want to sell houses (in a good or bad market). Regardless of the current trajectory of the market, the way they can increase their revenue is to increase traffic. The best way to increase your traffic on your website is to improve and enhance the user experience, not limit it. They should be looking at enhancing reporting and search functionality rather than taking a step backwards and limiting it. This info is in the public domain and it’s a losing battle trying to manage it. Perhaps they should rebrand as theirhome.ie.
Anyway one thing I have noticed (esp on daft) is that sometimes a house will relist with a new agent (sometimes the older one still remains. Are these caught by the report?
Example: http://www.daft.ie/1263354 @660K and http://www.daft.ie/1322390 @595K. It also shrank 32sqf in the mean time!.
December 28, 2007 at 11:08 am
Edgar – I have to echo the comments of the responses your post has received. Forgive me if this comes across as insensitive, it is not intended. But, there are far too many inexperienced property speculators in Ireland. Many of them have jumped in with both feet within the past 5 to 7 years, which in fact was too late! Buying and selling property is a long term investment strategy. You have to hold your portfolio for at least 10 to 15 years to achieve any meaningful return. I am aware of people through friends of friends who have sunk savings and remortgaged their primary residence to fund various speculative investment properties around the country. Unfortunately, their were certain mortgage brokers and lenders out their who got drunk on the notion that the party would last forever. Mortgages were advanced to persons who do not have sufficient earnings to support these investments (should rental income contract – which is the case in certain regions). Foreclosures will gather momentum in 2008 and onwards and people will be damaged. Investing a significant amount of your wealth or perhaps all your wealth in property is utterly reckless. Your strategy should be to have a balanced spread of investments. I think people are slowly realising the property market price reductions are only beginning, the worst has yet to come – confidence is almost gone from the residental property market. Invest in grain and bio fuel.
December 28, 2007 at 11:19 am
Excellent overseas residental property investment opportunities are available outside of Ireland. Take the hit now and off load your buy-to-lets in Ireland now before the eye of the storm slams home. Time to dump, dump, dump and take the cash out of the place.
IPW, the data you guys are presenting through this website is so rich and informative. It will be interesting to track what effects, if any, the stamp duty alterations may have on the market. Perhaps this is one to monitor as it will help form the basis for whether or not the change is having the desired effect?
January 4, 2008 at 6:03 pm
Do we know when the next report is out ? Thanks
January 9, 2008 at 4:35 pm
Edgar, Hopefully cheaper house prices will help your 6 children out in life and will more than compensate the loss of the money you were going to give them.