A quick update on the number of price drops. We will release further numbers and analysis later this week.
Over the period 22th March to the 30th March 2008 there were 703 price drops and the average drop was €23,739 or 6.2%.
The 703 properties reduced the price by €16.8million in total.
The number of drops per day was 88
Report available in html formats.
April 1, 2008 at 1:04 pm
Hmmm, perhaps signs of a slowdown with price contraction. Or maybe it is actually a sign people are now taking the decision to sell privately and dump their estate agent. I wonder what reason sit behind these latest figures? What do others think?
April 1, 2008 at 1:14 pm
This off breakingnews.ie today . Are they massaging the facts?.
Estate agents, Sherry FitzGerald, announced today that the average price of a second-hand house in Ireland fell by 1.9% during the first quarter of 2008, compared to a price reduction of 2.4% in the final quarter of 2007.
Marian Finnegan, chief economist in Sherry FitzGerald Group said: “The results for the price barometer show a definable reprieve in the pace of price deflation in the Dublin second-hand market.
April 1, 2008 at 1:15 pm
This off breakingnews.ie today . Are they massaging the facts?.
Estate agents, Sherry FitzGerald, announced today that the average price of a second-hand house in Ireland fell by 1.9% during the first quarter of 2008, compared to a price reduction of 2.4% in the final quarter of 2007.
Marian Finnegan, chief economist in Sherry FitzGerald Group said: “The results for the price barometer show a definable reprieve in the pace of price deflation in the Dublin second-hand market.
Ms Finnegan said: “The first evidence of an improvement in market conditions came in autumn 2007 with an uplift in internet activity and viewing levels.
April 1, 2008 at 1:58 pm
Ummm. How interesting that the “evidence” of an “improvement” came in autumn, when people were watching houses fall like a stone. I know a number of people who are by passing the estate agents, and selling directly themselves. I also know of a number of buyers who viewed the house with an agent, then approached the vendor themselves.
April 1, 2008 at 2:04 pm
how are people who are bypassing the EA selling? are they posting themselves on daft?
April 1, 2008 at 3:18 pm
No, they are posting in news papers, and apparently someone is Wexford is selling their house on e-bay.
April 1, 2008 at 4:32 pm
Yet again we witness how FerryShitz attempt to apply spin to the property market. They base their argument around the fact hit rates have increased on their website and by default I guess myhome.ie
If you actually read between the lines of what FerryShitz are trying to say, it is that the rate of second house price reductions have decreased and activity (web site hits) have increased.
However, they deliberately avoid to state how many units they are closing. You measure market changes by volume of units closing. Closings through estate agents are so behind forecast now that their annual turnover must be 20 – 30% behind plan and will compound by this amount again next year and every year onwards as long as price reductions persist. Sooner or later, the estate margins will be hit and next thing you’ll hear they will be looking inwardly to cost cut, trim off the fat, scale back branch offices, cut franchise commissions and kick backs and off course surplus to requirement jobs will be axed.
That’s the real picture facing the likes of FerryShitz and the estate agents in general. So naturally, they are doing everything in their power to prevent this happening.
They want to prevent real value for money coming back into the market. They have a strong vested interest in driving the market back up to high price levels. They are no different to stock analysts making statements about one stock over another, because the stockbrokers want drive up demand to purchase a particular share price, which then drives up the share price which naturally drives up the stockbrokers income.
Think about it people.
Cut your estate agent out of the sale and sell your house privately. You save on the fees.
It takes very little to really advertise your house to a mass population on the web, through word of mouth, intranet sites in your workplace, shop windows, local newspapers.
Of course your asking price is only as good as the buyers are prepared to pay. I guess 7 out of 10 sellers would rather sell their house for reasonable price reductions, close the deal and move on with their lives.
But no . . . their estate agents will absolutely not allow this happen and will spin all sorts of cock’n'bull stories not to allow accept a lower price. They don’t really have your best interests at heart – they just want greed and your money and screw you if you want to move on with your life.
The sooner sellers wake the hell up to the unethical, cartel like, marketing fixing practices which estate agents adopt then the sooner this housing market gains traction and drags itself out of the current stand-off.
Lesson 2 starts tomorrow
April 1, 2008 at 4:57 pm
The fundamentals affecting the market are changing (for the worst, I fear).
1. Irelands inflation continues to rise over the 2% max. level
2. No ECB rate cut as long as inflation rises (3.2% EU avg now and rising faster)
3. US$ versus € worsening
4. Irelands GDP will end up behind plan (a big concern)
5. Wage demands rise due to inflation pressure cooker effect
6. Further job losses expected and will worsen as we are uncompetitive
7. Public spending will be cut due to poor exchequer returns
8. Lake of political leadership to tackle these challenges
April 1, 2008 at 5:03 pm
Good post Fiona. Yes, I have to agree with No.8 bullet point. Fianna Fail Inc. got very significant challenges to handle. The effectiveness to run the country is sliding lately and the Mahon issues are resulting in them not keeping their eye on the economy and the welfare of the citizens. And we still hear Sherry Fitzgerald broadcasting all is fine the houseing market is set for recovery. Eh what planet are Sherry Fitzgerald on?
April 1, 2008 at 9:32 pm
Maybe the rate of drops has eased because sellers are now pitching at a lower more realistic price.
AIB reports made a lot out of a recovery once affordability improves. If the ECB don’t cut rates, if banks can’t borrow from each other at close to ECB then mortgages rates won’t come down, add to that
Inflation
Oil
Poor economic performance
Job uncertainty
No more 100% mortgages
Fewer buy to let
Investors getting out because equity returns are gone….
April 1, 2008 at 9:42 pm
100% mortgage? They are long gone now. 92% LTV generally the max and subject to excellent credit risk rating. Banks crying out to lend mortgages to the “right credit risk” applicant. In other words, lowish LTV, trades need not apply and so on.
Irish property is no where new affordable. There is still at least 20% excess in the prices. Its gonna keep sliding down. I would not buy this year under any circumstance. You will end up with negative position as price slides are persisting.
April 1, 2008 at 9:45 pm
Yes the banks and the estate agents trying to be bullish and get the the common person out there believing all is fine and dandy. Quite the opposite is the case. It is all spin, spin, spin and pure vested interest at play. They want to bring back the bad old days of hyper expensive property prices. Its all bullshit.
April 1, 2008 at 9:53 pm
I’d say the Revenue are all over the Rental Board in an attempt to identify anybody who is now letting a house out where they couldn’t sell it in the past and Revenue checking to see how the property acquired, if its an investment, tax liability, and trawling for false or inflated expense returns for upkeep and repairs which don’t add up. Watch for the Revenue going after the private rental secotr next at some point.
April 2, 2008 at 9:00 am
EDDIE SAYS:
Sooner or later, the estate margins will be hit and next thing you’ll hear they will be looking inwardly to cost cut, trim off the fat, scale back branch offices, cut franchise commissions and kick backs and off course surplus to requirement jobs will be axed.
Usen’t GUNNE have a branch in Bray? I think they closed it last year!
April 2, 2008 at 9:08 am
FerryShitz sold their branches and leased them back from the new owner about 2 years ago. Did BoI not do the same a number of years ago also? In fact, HOK did the same to. They knew what was coming, and so are already prepared. They will close branches, and lay off staff on a shop per shop basis, so there will be no big announcements or fuss in the press.
April 2, 2008 at 10:11 am
Umm. May 6th. The Biffo takes over. Wonder how things will pan out now? Business as usual?
April 2, 2008 at 10:19 am
While on one side the vested interest people do not want to price to slide, it is beyond reach of the common people and the government to stop a slide. If you look at the following website’www.realtor.com’ there are houses in Detroit in Michigan selling for 0 dollars ( it is true ).
The following link may give the real state. If an increase in 2 or 3% is realistic in any economy, which year prices will Irish housing fall to?
http://www.independent.ie/opinion/columnists/david-mcwilliams/picking-up-the-p.htmls-in-property-slowdown-1334794.html
April 3, 2008 at 10:53 pm
I am amased at the lack of comment from the Irish Central Bank in relation to the effects of the credit crunch to the general public. Lending is becoming expensive, mortgage lending is becoming tighter, consumer spending is reducing, job losses will worsen as a result and repo numbers will increase.
There is a lot of excessive positive vibe spin being played out by various economists at the leading banks and estate agents.
Yes, I think we all need to be very careful we avoid the dangers of talking the country into a downward spiral trend. However, it is my view there are many examples of gross negligence by many of the economists comments within the media.
I think there is a role here for the Regulator to enforce standards. I believe the substance of economists statements now require intervention by the Regulator to ensure balanced statements are broadcast. Economists have a professional duty of care, particularly when commenting about the state of the economy, the property market and general condition of the credit market. They are not presenting a balanced view, instead they are presentig excessively positive commentry which is very misleading.
This website and similar websites have helped raised general public awareness of the vested interests influencing the property market to their own advantage and the expense of potential home buyers.
Economists working for banks are just one such group with deep rooted vested interests. Naturally, their employer (the bank) have a vested interest in ensuring their economists are seen on TV or reported withing print media giving too positive a picture of the current market conditions. They need to ensure mortgage credit growth does not come to a complete stand still and fear this will happen if their economists actually called it as it is – the Irish property market is in crash mode and the trajectory is downward in direction.
The estate agents (Sherry Fitzgerald in particular) are also spinning excessively positive commentry, totally bullish.
The general public need to understand how these vested interest groups are manipulating the media in an attempt to try and ignite a return to hyper inflated property market values.
The property market has achieved approx. 15 – 17% market price reductions however, asking prices are still heavily overpriced by a factor of approx. 20 – 30% on average nationally. It is worth noting external and highly respected European and international think tanks have gone on record as declaring the Irish property market as being 30% overvalued. The price corrections achieved so far is only the beginning and the estate agents, banks and various economists (working for the banks) are trying to arrest the price falls and bring confidence back to the property market in order to fuel price rises.
Buyer beware! Research, research, research. Offer 20 – 30% below advertised asking, don’t be fooled by estate agents suggestions of alternative offers, ask for formal confirmation of the alernative offer and if they object, then they are not interested in transparency. Remember, estate agents are not regulated by an independent regulator. They self regulate and manage member discipline internally behind closed door.
April 4, 2008 at 12:25 am
No one really knows how far this market will fall the external variables are totally unknown and I think all the so called experts are just making a guess.My advice is do not make any offers untill the fall stops could be another 10% maybe 50% no one can tell.
April 4, 2008 at 11:49 am
Where did this figure of overpriced by thirty percent come from? What is wrong with aiming for the tried an d trust formula that the fair value of a property is 100 times the monthly rent?
April 4, 2008 at 1:02 pm
Inclined to agree with the ‘anonymous’ poster. The perceived 30% over valuation is purely academic. Prices will bottom out at a level which buyers are prepared to pay. Nobody really knows what the bottom level will be but reckon we have a long way to fall, this is just the beginning.
April 4, 2008 at 3:03 pm
thirty is being bandied about much like “prices never fall” used to be. They even have IPW supporters doing it! IMF predicted just a ten percent fall in states!!!
April 5, 2008 at 2:21 am
To Mervyn and Anon, you both question a 30% fall and say that one should look at a price of 100 hundred times monthly rent. Look at Rathmines village, where a 2 bed apt. rents for 1600 a mth, by your calculation, its price should be 160k rather than the current 450k. The 100 times Mthly rent formula, is tried and tested but prices in Ireland currently are many hundred times mthly rent
April 5, 2008 at 11:26 am
If Cowen were serious about improving the housing situation, rather than letting it rocket out of sight or plummet into freefall due to the criminal greed and chicanery of the estate agencies, then he could start by setting up a record system of property sales which would be available for public scrutiny, then by installing a property regulator who would deal peremptorily with the nauseating kind of estate agents we have in this country. The government moved quick enough to deal with bulls and bears on the stock market who were putting the financial institutions and economy in jeopardy, following the example of Britain. So why should Cowen not now protect the Irish property market likewise and follow Britain’s example of absolute transparency of property transactions. When I use the term ‘property market’ I am of course talking about the people who are the property market, not those who manipulate them and ultimately are not acting in the best interests of the buyer or the seller.
April 6, 2008 at 8:49 pm
After taking on board all the recent chat about price drops and expected further drops; recently made a bid on a house in a good residential area in Dublin at 20% less than the asking price only to find that not only was it rejected by the owner but they then actually raised the asking price! The EA told me that they might be able to convince them to take the asking price.
Still searching for value and people who are trading up as opposed to people downsizing as they have no incentive to sell in a declining market and do not seem to want to move at all from the asking prices.
In the more established areas I am looking at, not really seeing the market readjustments that are being reported in new builds, suburbs and apartments. At the moment anyway….or else the houses are selling quietly!
Any other experiences in these types of areas would be interesting to hear.
April 7, 2008 at 8:31 am
Gerard, these people are clearly still in denial, keep underbidding and you will get a good place when you meet a reasonable seller.
April 7, 2008 at 12:17 pm
Hi Gerard,
Couple of tips for ye. Firstly, you really need to do your home work before making an offer on any house. Dont’ ask the estate agent how long he/she has the property listed, you’ll get bullshit car salesman shite! Take a look at the IPW data and propertypin.com and similar websites. You can find out when the property first listed and from there track the price movements. Now look at comparable listings in the area, validate are they on for a lengthy period of time aswell? How are their prices holding (or not as is the norm these days). Now you got only half the picture. Play your cards very close to your chest with the estate agents, remember this shower of gangsters just want to screw you royally!!! Play them at their own game, tell them white lies, tell you are a cash buyer, mortgage approved and with your own house sold. If they probe you for more info like who have you got your house listed with, play the hard nose game and be blunt enough to tell them it’s not important to know that info right now, tell them your in the market for a property and you will be calling the shots. You got to grow yourself a set of big brass balls and quickly put them on the back foot. Look for a property which has been on the market for ages, where the sellers are in a situation of urgency. Look out for sound bites from the estate agent telling you the sellers are in no rush and want to hold out for the right offer. Make offers on everything and play the market the exact same way these gangsters have played everybody over the past decade. And what’s even more common these days is for potential buyers to approach the sellers directly. Do it properly, write a professional letter, enclose you solicitor contact details and explain you are ready to buy and close as quickly as possible. You be surprised the amount of sellers out there who are totally frustrated with their estate agents and would sooner cut their costs and sack their estate agent, saving considerable fees.
Push, push, push and make offers at least 15% off the asking (assuming they haven’t dropped already). Be a pain in the ass to the estate agents, use false names and identities, get clever cause mark my words, the EA’s are one of the biggest wrip-off professional services crowd you’ll ever deal with – BRASS BALLS!!!!
April 7, 2008 at 3:30 pm
Thats good advise I never give any estate agent or auctioneer my correct name. That way they can not claim they introduced you to a buyer. If a sales contract goes through later privately even months later with the owners,they do not recognise the name and connot claim commision as they have no records of introducing the client.
April 7, 2008 at 4:05 pm
I have to agree with that chap Max. Never ever ever give estate agents your true name. Never give them you address either. The main reason they record this info is purely to chase the commission if they later get wind that a house they were selling ends up going for a private sale. They trawl the records, if the names match, bang, the sellers are in hot water with the estate agents. Although, they tried that on with me and my husband and we politely told our estate agent to FO. They went mad and issued all sorts of letters. From our perspective we didn’t sign a contract with the estate agent, they just wrote to us at the outset detailing they noted we wish to retain their services, etc, etc. I know its probably sharp tactics by us but to be honest, DNG had our house listed for 18 months and were useless, utterly brain dead, void of any talent (not that you need muchy talent to shift houses). We geve them the boot and had a cash buyer within 6 weeks, and closing the end of this month. DNG cost us €120k in lost opportunity cost (if they had got off their arses and put the effort in months ago the house will be long gone). Best of luck Gerard and play the clever game.
April 7, 2008 at 10:54 pm
Great website!
Did you hear Hurley’s comments today. Apparently, he doesn’t agree with the notion that irish house prices are still 30% over priced. It is not sensible for the top man at the Irish Central Bank to come out with this sort of comment. It could be seriously argued his comments ( and therefore the comments of the CB ) are an attempt to ‘manipulate’ the free market. Hmmm, I wonder have the boys at the head of the banks got together with the CB to stir it up a bit and arrest the free market price falls?