Analysis – 12 September 2007

Of the 982 properties that dropped their price on MyHome 14, 278 have dropped the price previously.

From the previous analysis 252 that were listed as for Sale are no longer listed on this report – 158 Removed, 80 Sale Agreed, 14 Withdrawn

34 properties that were Sale Agreed or were removed from MyHome have been re-listed as for sale.

Assuming no new properties are listed and properties continue to go Sale Agreed/Withdrawn at the current rate then there is currently 11 months supply on the market.

There are now 4,793 properties that are still for sale and have dropped the price at least once. Total Stating Value of listed properties is EUR 2.2bn. Final value of listed properties is EUR2bn. Total drop is 7.4%

Summary Stats

The data in excel and html format.

As these files are getting very large at a latter stage I will try and post the data by Country or Province to make it more manageable for people.

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128 Responses to Analysis – 12 September 2007

  1. Ronan says:

    There are ~50,000 residential sale properties on the market. The 4793 properties that have dropped prices represent roughly 10% of the market. Therefore the 7.4% average drop in prices for the 10% of the market that has dropped prices indicates a humble 0.74% drop in the total market (asking prices, not final negotiated sale prices).

    You could argue that the other 90% of properties on the market who have not dropped prices have their heads in the sand, or a new to the market and are being priced in accordance. But realistially, the total market has not fallen more than 1% (asking prices).

  2. Ttv says:

    Just one small adjustment, 269187 Crosbies Yard, Ossory Road, Dublin 1. – this has the price dropping from 375k to 290k a drop of 85k. The 375k is for 2 beds and the 290k is for one beds. The one beds however have dropped from 300k to 290k so a 10k drop. Just thought i’d add that in

  3. Opus_One says:

    Ronan – An interesting play on the numbers but telling anyone that prices are down just <1% is a very hard sell. Keep in mind that over the last 10 years in Ireland many properties would have sold in excess of their asking price, often by double digit percentages. So if you back out the speculative amounts paid in excess of the asking price in the past and then factor in a reduced offering price in the current market then the actual price paid to own a home is sharply lower.

  4. LC says:

    Ronan – It is also worth noting that these stats are based on MyHome properties where the total number listed is less than half the figure you quoted.

  5. […] new update from the IPW website. Of the 982 properties that dropped their price on MyHome 14, 278 have dropped the price […]

  6. Ferry Shitz says:

    Ronan. Your peers at Lisneys have tutored you well on how to turn negative stats into something that sounds a lot better. Previous posts have indicated that there are approx 24000 houses listed on myhome at any time. 4700 in this population have dropped at least once. So 20% of sellers have dropped their prices.
    Looking at the raw data, the average drop is closer to 7% than 1% and is approx 40K.

    In the current climate any potential buyers would be fools not to offer less than asking (regardless whether it has dropped or not already).

  7. Ferry Shitz says:

    Anyone notice the clever wordsmiths the EAs have employed for their property ads.. New Asking Price proudly pasted across some of the ads on Thurs IT. I think I know where Karl Rove went when he left the White House.

  8. Chalice says:

    Ferry Shitz

    Interestingly, I have also seen “new to the market” as opposed to “this one’s been on sale for over a year now”

  9. Who's to blame? says:

    Folks! We are a year behind the US. Spain is a year behind us and the UK is hard to call (but it will be crashing in the next year or two.).
    Ronan. I’ve been following this for a long time now and from the US I can tell you
    1) builders offer extras for sales.
    2) It doesn’t work so they capitulate slowly at first then a land slide.
    3) Only then do the private sellers start to drop prices.
    – strangely the private sellers here have stepped up and dropped prices before the builders in some cases.
    4) WE ARE GOING TO FARE FAR WORSE THAN THE US.
    – The US smart guys realised a long time ago that freedom of information allows a quick correction.
    – The UK is the same (http://www.nethouseprices.com/index.php?con=sold_prices) enter the post code and it will tell you sale price of all houses on the road.
    * A quick correction is in the interest of almost everybody.
    – So they make info available.
    – Bertie has measures in place to obfusticates.
    * The correction will be long and the hit to the economy will be very hard.
    Ahhhhh. Why bother….

  10. Alex says:

    My wife told me that now a lot of companies we never heard before on boards beside houses for sell. Usually it was couple of big players like Fitg or Hok. Why it’s changing?

  11. Dan Mc "Laugh"-lin says:

    Alex,

    I agree that I have seen this shift, particularly in Dublin TO Daphne Kaye and Felicity Fox et al FROM Sherry Fitz, DNG etc.,

    I dont know why?

    I can only speculate that the big boys are being blamed for not being able to sell houses and sellers feel that a shoulder to cry on is better than a hard, cold, calculated read of the market?

    Or else, the big boys are tied to keeping prices at a certain level and only the small players can slash prices and make sales quickly without upsetting thier bigger clients (ie property developers)

  12. angela says:

    Dan Mc”laugh”-lin

    The reason you see different auctioneer’s names outside houses now – the big boys have had it good for too long selling – they didn’t even have to sell the house, they sold themselves – the gravy train is over. Now you see different auctioneer’s names poping up – they have to earn their money and match buyers to sellers. The days of sticking up a sign and hoping for the best are gone. Believe me I know – I’m one of those 55,000 or so trying to sell my bricks and mortar – if ever!

  13. LC says:

    Angela,
    Just wondering have you had to reduce the price yet

  14. scotty says:

    How can you tell your house price is too high. If its priced right you should see one or two viewers each week. If you have not seen anyone in a month drop it at least 5%. Regardless of what the estate agent is telling you.
    Waiting for fall or spring or whatever is not going to work. Prices are always at their lowest nov- dec of each ye and peak about march- april
    Thats no going to happen next yr . the market is already flooded wait till jan and the no of houses on daft double again
    For all you know he might be trying to sell his own or his friends round the corner and does not want the competition.

  15. […] a Random Walk Blog, talking about the Irish Property Market. Stats come from the Irish Property Watch Website. Assuming no new properties are listed and properties continue to go Sale Agreed/Withdrawn […]

  16. LookingForYield says:

    Who’s to blame? – cheers for the UK website. Very useful indeed.

  17. Alex says:

    I read some report posted on that website back to the beginning.
    Interesting, they predict 40-60% drop in value of houses.
    There is the house for sale in Avoca Park, Blackrock 5 bedrooms. In 2002 asking price was 999,000 euro. Now the new owner is asking 3,000,000 euro.
    Lets do math – 3,000,000 -60% = 1,200,000 euro, which for me make sense accounting an inflation for 5 years.
    I am employing 8 people. I can afford maximum 350,000 house and do not damage my life stile (if we may call it so, because it is cinema on weekends for family of four, 8 years old luxury car and none privet schools). I know a lot of people, but I do not know anyone who can buy a house for 1,200,000 euro.
    About new names on boards beside houses for sell. Theory of my wife is: there are two many houses which need to sell fast( again, does anybody knows the house which is for slow sale:)) and big boys do not have enough staff to manage that. Any bells about: “supply and demand” in economic.
    I hope prices will come to the order. We have everything pointing on that. Because if it’s not, “The Wall Street Journal” will call it “The Irish Miracle”.
    I want to sharp down of prices like everybody else in my shoes and it is nothing wrong with that. But people like me I think will be more satisfied in the end of 2008; again if Ireland has same economics rules and same oriented investors like the rest of the world.

  18. cracker says:

    I have had a house on the market now since April, it is in showroom condition and has had a lot of viewings ( 2or 3 a week). It has been sale agreed twice, the first time for 15K above the asking price much to our surprise. I knew it would fall through and it did. The purchaser on this occasion told a few lies to the EA re mortgage approval and as the story unfolded I came to see that the EA should have spotted this a mile off.

    The second time was a different story, prices had come down in the area and we had one or two buyers who wanted the house at their price, fine, we are reasonable and feel we understand the market, we let a guy who played hardball for about 6 weeks have the house at the price he wanted. 5 weeks later and he has not signed contracts despite making many demands during this time re items of furniture he wanted which we have complied with. I got a call from the EA last night to tell me he has changed his mind despite getting the house for 80K less than last year and 50K less than the previously agreed sale. Is this not value or was this buyer a messer all along.

    I am currently on paying two mortgages one for our new house which were due to move into last month and our own house. Needless to say things are tight.

    So to the point of my post, there is value to be had currently, however I would ask that potential buyers be more considerate when making offers and placing deposits, it cannot be that hard to make your mind up which house you want, strike a deal at a price you are happy with and honour the deal.

    Sellers also have mortgages to pay children to feed etc. We are not all faceless investors.

  19. Restless says:

    Tell that to the generation that were gazumped over the last ten 10 yrs; welcome to the fruits of open and non commital nature of verbal contracts in the Irish property market that builders and sellers relied onto squeeze home buyers for the past 15 yrs. So gird your loins and take it like a man

  20. scotty says:

    Crackers comments were interesting.There is also another posibility. No market for houses at all. At the moment anyone selling is probably lucky to get 90% of the asking price. With the credit crunch, falling prices and difficult valuations. Banks may cut mortgage lending to a smaller % of the asking price say only 60%.Then instead of getting 90 % of the asking price, offers are coming in at 75% or 50 % of asking price.Effectively the market will dry up completely as you cannot value property so you cannot borrow against the value. If things are that bad, there will be no buyers anyway.Exactly what happening to Northern Rock securities and other bank securities No one will buy. It cannot happen in at the housing level in Ireland dont bet on it.
    Ps Cracker what was the original price of your house,

  21. angela says:

    hi lc,

    to reply to your question, we’ve reduced the house twice. We’re in rural location, once-off house on 1 acre of mature gardens – can’t reduce too much more. House is in mind condition, a lot of people think we’re mad selling after putting so much into it – beginning to think we are – you can’t give the house away for nothing either.

  22. Opus_One says:

    Just read the Sunday Tribune’s article “Getting the Facts on Dropping prices” featured today in the property section. As many of you have probably read the article sets out to discredit the efforts of the online community for their work in producing this excellent report.

    Open question to Valerie Shanley: So who should young Irish people look to for reliable pricing data on the irish property market ? You’re friends at Savilles & Sherry Fitz perhaps ?

  23. verbatim says:

    Opus_One,

    I’m not sure the article does set out to discredit anyone. By even writing about IPW and thepropertypin, especially on the front page of the property section, they have introduced these websites to people who will not have been aware of them, and every time IPW gets mentioned in the press it just makes it a more legitimate source of market data. And the Tribune were able to verify a number of listings.

    The fellow from myhome mentioned some inaccuracies but there isn’t an example of one in the whole article.

  24. restless says:

    It would appear from the article in the Tribune that ‘MyHome’ are bent on stopping you reporting price decreases. I hope this is not possible and i would offer financial support, along with, hopefully, others to repel these contemptuous and totalitarian attempts to prevent analysis of data in the public domain. Ironically ‘MyHome’ is owned by the Irish Times, the self styled rag of the intelligencia and ‘impartial’. The journalists in the times have published often on the shady deals and self interests of coporate and political life; it will be interesting how they cover any such attempt to silence the truth of such data analysis to suit their own vested and corrupt interests

  25. Brian says:

    If they attempt to stop any of our online websites, it is an attack on freedom. Quite literally. It would be an attempt to shut us up.

    Blindjustice

  26. The prices are dropping! Here in Bray “Dog boxes” went on sale at easter at 1.3 million. They have changed agents and now Sherry Fitz (those people who helped drive the market crazy) are asking 1.1 million !!!! that for the people denying any fall in the market is €200,000 !!!! Any further questions ?????

  27. Anonymous says:

    Aertel page 130. Alan Greenspan predicts double digit interest rates.

  28. CiaranB says:

    Anwyone know if the sub-prime mortgage martket in Ireland still active? I think 100% mortgages should also be classified as sub-prime. They are like debt (sic) charges set to explode when interest rates rise and liquidity tightens. Northern Rocks problems were exacerbated by the volume of 100% loans on their mortgage book. Ireland is behind the States but it is only a matter of time until defaults begin to hit our market and in particular 100% mortgage holders, of which there is, sadly, all too many. Seems like the worlds central bankers are acting as bomb disposal experts – injecting liquidity into the market to try and neutralise the depth charge! Alarmingly, however, interest rates on the interbank markets are ticking up and liquidity is draining away. Banks and high street customers are marching with their feet and hoarding cash for fear of being wiped out in the ensuing explosion. Money continues to tighten despite the bomb disposal experts best efforts. Exagerated loan and mortgage debt written over the past few years, to make profits for banks, intermediaries and racketeers, is turning out to be worth a fraction of its nominal value. What we have witnessed is uncontrolled debt inflation and it turns out to be every bit as dangerous as uncontrolled price inflation! The debt charge is winding its way deeper, nearer to the point of no return. There will be alot of innocent casualties and not so innocent ones. Goodbye 100% mortgages, goodbye sub-prime mortgages, goodbye to some banks, goodbye to many speculators, goodbye CDOs and goodbye cheap money.
    Hello higer interest rates, hello CRASH and hello CASH! Back to the future….

  29. 13Also says:

    The Northern Rock situation does not bode well for similar Irish institutions. It appears Northern Rock was a fundamentally sound institution that made relatively sensible loans to people but got caught short of funds due to unforeseen circumstances. Although, in the media yesterday in the UK it was chastised for issuing loans for up to 5 or even 6 times a person’s income. Compare this to Ireland where 100% interest only loans are thrown at people at well above this multiple to buy overpriced shoeboxes. If it can happen to NR then can the Irish Life and Permanent cannot be too far behind? They have a similar borrowing profile and most likely a worse loan book. Combine this with the fact that prices are falling in Ireland and still rising in the UK.
    It raises an even bigger question of who, like the Bank of England, will stand behind the Irish Permanent. The Irish Central bank has no money. Will the ECB really want to bail out a financial institution that does not pose a systemic risk to the European banking system? I think they will take the same view as the German Ambassador i.e. you think you’re so wealthy then you sort out the mess you made.

  30. andrew says:

    what affect do you think this will have on rents? rent is pure supply and demand. if rents rise too much here Ireland may just price its population out of the market.

    the government seems to want to sit idly by and hope the whole thing sorts itself out, but i think we’re in for a prolonged mess.

  31. Rainmaker says:

    IIB and NCB have come out stating that they think the next ECB rate move will be to lower interest rates. When before the subprime mortgage and liquidity crisis, we were looking at possibly of 2 rate increases before Christmas, what effect do people think this type of move will have on the property market?

  32. Foyboy says:

    I wouldn’t expect anything less from VIs other than to try and talk the market up.
    US Federal Reserve chairman Ben Bernanke has said “Losses from sub-prime mortgages have far exceeded even the most pessimistic estimates”. This was after the Fed cut base interest rates to 4.75% from 5.25%. Maybe the US Fed Reserve know more than they are telling the public.
    If things are this bad in America, Ireland can’t be very far behind.
    And the ECB don’t really care about Ireland’s problems when deciding the interest rates. They are monitoring inflation across the EU and in particular the German economy, which is still doing well.
    If anything, the ECB may leave the rates as they are or worse case senario, raise them to meet the US rate.
    Property (and the economy) in Ireland is on a downward slope and won’t be reversed in the foreseeable future.

  33. phoenix says:

    I noticed that myhome.ie has changed (i think) there site so that now for example you cannot copy the address of a advertised place anymore. i.e. before you could drag ur cursor over the address but not anymore.

    Is this their response to the adverse reaction to your property price falls thru your program which gets the info from the site. This i believe would stop ur program from retrieving address and comparing past prices.

  34. jo says:

    phoenix – I’ve just noticed the same thing. They have rendered all addresses and prices as images. Perhaps they have come under pressure from estate agents and they are trying to mask the price drops that are so evident in the market. It’s a rather pathetic decision and smacks of desperation. As a potential buyer, it certainly puts me off using their site.

    Obviously this will put a short-term stumbling block in the way of identifying price drops in the Irish market. However, as the use of increasingly complex captchas indicates, it’s trivial to parse unobscured text from images – there is plenty of open-source software out there to do this. It’s just a poor decision made by the owners/developers at myhome. Clearly they feel that buyers should not have access to price drop information. In the long-term I believe that their site will suffer as a result.

  35. Opus_One says:

    The management of my home should be ashamed of themselves. It certainly does portray them in a very poor light. A boycott of the site would be a fitting punishment – I certainly wont be visiting their site any time soon.

    Will this move prevent future reports from being generated ? Other than keypunching are there any other ways to extract the input data ? Mind you in the early days someone did actually keypunch the data to create a more primitive report proving that where there is a will there is a way.

  36. jo says:

    Opus_One – It certainly does a discredit to their site. Due to the fact that there are so many houses now on the market and that price drops are happening so frequently, I’m not sure how practical manual data entry would be. However, I think they might change their minds, but not for any altruistic reasons.

    Firstly, currently myhome is very-well indexed on Google. If you want to find more information about that house you saw for sale on “St Patrick’s Road”, searching for the address from the Irish pages on Google will probably produce a string of hits from myhome. However, their new design doesn’t include the text address anywhere in the HTML, unless the agent repeated it in the description, which probably happens < 50% of the time. So this decision is going to affect their positioning on Google once those pages have been re-indexed over the next few weeks.

    Secondly, this move is bad from an accessibility point of view. Since prices and addresses are now in fixed-size images, the fonts can’t be scaled for users with vision problems. If they seriously hope for people to use their site on smaller mobile devices (ie the average Nokia etc), they’ll also have to revert to a design that uses text for these crucial bits of information.

    These might seem like trivial points, but from a web development perspective this change is a major faux-pas. Since the site was reasonably well-designed, I can only assume that management or financiers have stepped in to make this poorly-informed decision.

  37. phoenix says:

    Jo : Yes it will affect their indexing on google but it was a clever move by them so now no more cached entries will appear of previous house prices.

    Its well within their right to do so but it should be made public as it is blatant censorship. Had the report detailed house prices increases they would not have censored the data.

    If anyone has logins to AAM or propertypin can they post this move by myhome so that others can be made aware of it. Perhaps the sunday tribune might want to follow up on their last sunday publication to highlight the issue or would such publications be in favour of such censorship to protect their revenue from property advertisements.

  38. Anonymous says:

    I think the best response to this is to set up a similar scheme for a different website, but for IPW to specifically NOT actually publicly identify which website is being analysed, citing what happened with myhome as the root cause for this decision.

    IPW, what do you think?

  39. Beal says:

    My take on the move by myhome is sheer desperation – and stupidity. This may be a good short term solution by them to mask price drops but it also highlights how bad the situation is – and their fear. I was in an EA’s office the other day picking up some information on homes I am watching and heard one of them tell a potential seller that the market is “not bad but a bit slow” and that the only problem a seller might have is that the houses are taking longer to sell. Not a word about price falls.

  40. Kieran says:

    Text in images makes the site less accessible to those with visual impairments. This discriminanatory move might get some bad publicity from someone like the National Council for the Blind.

    Of course, the mobile interface is still easily screen-scrapeable:
    http://wap.myhome.ie

  41. jo says:

    Kieran – Thanks. I wasn’t aware of the mobile interface. It does make their efforts to block price/address information on the main site a little pointless. Presumably this has all come after the attention IPW received in the Tribune.

  42. bikeman says:

    Is it up or down. Not even the so called pundits know.
    Sunday Times 23rd September Property Supplement – “It appears we could be seeing the first signs of an end to the Dublin property slump. With fears of of further interest-rate hikes slowly abating, the lower end of the market is fast showing the early signs of lifting off the bottom.”
    Sunday Times 23rd September Business Supplement – “ICS, the home loan provider, has told motgage brokers to expect a rise in borrowing costs as early as this week…..The hike hike, which is likely to be copied quickly by other lenders, would hit those looking for new mortagages.”

  43. Bill says:

    In the past intrest rates charged by the irish institutions were based on the margin above base rate at which they could borrow in the wholesale market IE. base rate was 4 % they were charged about 4.07 % the extra charge was for credit risk……..because of the credit crunch there is now a much bigger charge on their borrowings for this credit risk of between .5% and .75% as a result Irish institutions in the medium to long term will have to raise their rates to account for this, so as a result the ECB base rate is not as relevant as it was …………and as the market feared they would have .25% intrest rate increase they will now have to contend with a rise twice that rate. In time there will probably be a settling of this wholesale price but that will probably take at least 3 months and will probably never go as low as before………due to a revaluation of credit risk

  44. euribor says:

    I think what shoot up recently – despite flat base rate – was the Euribor, on top of what banks add their markup. Euribor (Euro Interbank Offered Rate) is a daily reference rate based on the averaged interest rates at which banks offer to lend unsecured funds to other banks in the euro wholesale money market (or interbank market).

  45. Bill says:

    EUIBOR

    Great so do you know what this rate is at the moment? and would you know what the rate was before the current crunch? and what has been the high of this rate ie is it going up or down……..sorry for all the questions but I dont have access to this info……and I think this is what the next rate move with the Irish banks is going to be contingent on, and in turn what happens to property……Thanks again

  46. JimmyThe Fish says:

    When will the next report be out? Thanks.

  47. Anonymous says:

    Will IPW still work with the new Myhome price imaging coup? What now for IPW?

  48. bill says:

    Anonymous & Euribor

    Thanks very much for those euribor rates website……… do you guys know what time period do the Irish banks use to fund their mortgage book is it the 3 month rate??

  49. Dogdays says:

    They will use a variety of different sources and terms. Different lenders into the interbank markets are willing to lend for different periods.

    The Credit Unions are an important part of the lending base in Ireland. Also large companies with spare cash flow are important sources of spare cash.

    However three months euribor is the base rate.

  50. Dogdays says:

    Just to add there is supposed to be a problem developing next month as a lot of three month deals involving Permanent TSB & Bank of Ireland are coming to an end. The local market will also be hit badly as liquidity will decline with IT for the self employed payable in October, Preliminary tax for 31/12 y/e coys due in November and Sept/Oct VAT returns due on 19/11.

  51. Bill says:

    Thank you very much Dogdays

  52. Opus_One says:

    Folks – Until the new property watch comes to light keep yourself amused with the following excellent buy to rent graphic. Its a US based model so there is an entry for property taxes that is not really applicable to Ireland (however you could enter zero here or try annualize your stamp duty costs).

    Anyway the results are shocking when you model a reduction in property prices of say just 1% even considering a rent increase of 10%. Give it a try…. the results will shock many of the “rent is dead money” crowd.

    http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html

  53. Galway Observer says:

    The auction market in Galway has held up reasonably well, if you believe the hype from O’Donnellan Joyce who are main cheerleaders in the city for the ‘everything is flying’ and ‘there’s an offer of 600 on that,’ brigade. Anyway it finally cracked last week when several properties failed to sell.

    Builders are finding it impossible to shift any new houses. A new estate near me is half occupied, but that was the first phase, and they have open viewings each Sat and Sun currently for the remainder and no-one is turning up.

    Incidentally I hear from someone in the building trade that Heitons Builders Supplies are down 80% on turnover since the Spring. This seems like an exaggeration, but who knows?

    How secure is our banking system if some of the major developers go belly up?

  54. Frank says:

    Ronan,

    While there was something in what you wrote in the first comment above, I’m afraid your analysis is flawed. You infer that the 4,793 properties that are still for sale and have dropped the price at least once are otherwise representative of the other 45,000 you say are on the market.
    – Firstly, unless they are also on Myhome, nothing can be said about them in this context (we don’t know as much about their price movements; LC above says fewer than 25K are listed on myhome).
    – Secondly, the 4,793 may not be the total no. of myhome.ie properties still for sale with price drops, just those identified by this excellent website over a limited period.
    – Thirdly, those properties that have been removed may be indicative of a dropping market as are those not listed (and therefore not counted) for the same reason.
    – Finally, many of the other properties listed on myhome.ie will have been first listed at a reduced price relative to what they would have been listed at during the peak.

    In conclusion, it is difficult to judge how far the market is falling from the 7.4% figure and you would be right to say that we can’t infer that the market has fallen by the same amount. However, we can look at the trends on this site and elsewhere. All the indicators show the trend is downwards, and quite rightly:

    Any sane investor will get a higher return in a high-interest savings account than from a buy-to-let in a falling market with high interest rates. If/when the investor market dries up/goes in reverse the market cannot help but fall faster despite an increasing population. The holiday home market is likely to go into reverse as well because most people who could afford them could do so only while they were rising in vaue (and with low rates). High rates and even slightly falling prices make holiday homes far more expensive than they were.

    If the market worked perfectly, expected future growth in the maret (due no doubt to “the fundamentals driving demand” we hear about) should have been factored into present prices before interest rates went up. If so, the market should naturally fall (perhaps substantially) following the – then unanticipated – rate rises or any subsequent unexpected economic slowdown (which has also happened). If instead, the market was overpriced, we could expect a much bigger drop, perhaps overshooting over the course of months and years to prices that undervalue the housing stock. Wait and see?!?

    A general comment: What slows market movements is related to the economic concept of “sunk costs”. . People say, I paid x, so I can’t sell it for y. If you’ve bought something, the money is gone (sunk). In a falling market, you have to forget how much you paid and ask how much is it worth now and will you lose even more money if you hang on to it.

    Even as a humble blog commentator, I feel I should declare my interest as a non-property-owner who wishes to buy a first house before long.

  55. Ciaran says:

    What do you do if you are Minister for Housing and your Department of the Environment stats point to a 5% drop in 2nd hand house prices across the country? : Start digging around in the stats for some good news:

    ‘Commenting on the housing market, O’Keeffe said that “there seems to be a lot of negative comment of late from some commentators, some of it selective and, I believe, at times unbalanced. It is well worth noting that average house prices in June 2007, according to the Permanent TSB index, were still 16% ahead of prices in June 2005. ” ‘ http://www.environ.ie/en/DevelopmentandHousing/Housing/News/MainBody,15406,en.htm

    If he had picked the month of July instead of June the figure would have been 13%. Now what’s that he said about being “selective”? 😀

    The DOE stats are located Here

    Here‘s an article from the Examiner:

  56. Ciaran says:

    Is that Examiner article the first use by the media of the verb ‘to plummet’ in relation to Irish house prices? 😐

  57. 0747 says:

    The Examiner article today confirming a large drop in prices over the first half of the year is actually quite funny. I have never seen so many of the standard excuses put into one article. The excuses are suggested by the economist from the ESRI were 1) there was uncertainty due to the stamp duty issue 2) we dont know what type of houses these figures cover i.e. Detached or S.Detached ??? does this matter? 3) the drop mostly happend in the first quarter so, inferentially, things are possibly getting better now 4) these figures suggest supply and demand are coming into better balance so prices should not fall any more. The guy then added strangely that ” Negative comments and overreaction – to the figures – were undesirable”. It is quite strange that a supposedly impartial government body should hold such strong opinions and be trying to prop up the market.

  58. anon says:

    How can I send an email to the administrator of Irish Property watch?

  59. Ciaran says:

    0747, I believe the ‘negative comments and overreaction are undesirable’ statement came from Batt Man rather than the ESRI.

    It goes without saying that the standard positive comments from EA’s and their ‘economists’ are, as always, most welcome by the Minister. 😀

  60. Frank says:

    Ciaran,

    There is a fine quote from Minister O’Keeffe on the Dept. of the Environment page you linked to, (http://www.environ.ie/en/DevelopmentandHousing/Housing/News/MainBody,15406,en.htm):

    “Cooling in house prices should bring more buyers into the market and ensure it’s continued strength.”

    If so, a collapse in prices would prevent a collapse.

  61. Ronan says:

    It is sadly hilarious that myhome are trying to obfuscate asking prices on their site, by using the image renderer. Ask any decent economist and they’ll say that property crashes are eased (speeded through the correction) by transparent market information. That’s why sale prices are public information in developed economies like the UK and the USA.

    Tip for IrishPropertyWatch.com:
    Myhome have not obfuscated the asking price in the “Stamp Duty” calculation section of the brochure page. Use that number instead. If they do obf that number, move on to use the mortgage quick quote number from their sponsors ads.

    If they had their heads screwed on right they’d realize (from this site) that there’s a market for this kind of information and start providing it themselves instead of sticking their heads in the sand. But whatchagonnado, eh?

  62. anon says:

    I think we should be careful not to mention ways around the myhome.ie image rendering as I’m sure myhome will fix it as soon as we mention it! Best keep shtum! The IPW guys will figure it out.

  63. Anonymous says:

    There are plenty of free OCR scripts out there that will read an image and convert it’s contents to a text string.

    Quick google brought up this.. not sure it will do the trick, but something similar should:

    http://search.cpan.org/~leocharre/PDF-OCR-1.03/lib/Image/OCR/Tesseract.pm

  64. anon says:

    There are plenty of free OCR scripts out there that will read an image and convert it’s contents to a text string.

    Quick google brought up this.. not sure it will do the trick, but something similar should:

    http://search.cpan.org/~leocharre/PDF-OCR-1.03/lib/Image/OCR/Tesseract.pm

  65. Anonymous says:

    Can we asume that the reason for the change to myhome.ie is that many more houses will be dropping their prices in the coming weeks?

  66. Anonymous says:

    its time to start the analysis of daft, easier than OCR of myhome

  67. jo says:

    @Anonymous: Unfortunately there are many properties on Myhome that do not appear on Daft, particularly at the upper end of the market. As a result, the analysis will likely be skewed. Daft have previously been more dominant in the rental market, but hopefully people will see Daft (or any other site that doesn’t try to hide property prices) as a superior alternative to Myhome. It really is unfortunate (but unsurprising) that the print media haven’t reported on Myhome’s rather desperate tactics.

  68. verbatim says:

    If you’d like to see some analysis from Daft in the Dublin area look here

    http://www.thepropertypin.com/viewforum.php?f=20

  69. farcom says:

    My home could be in breach of accessibility guidelines for the visually impaired as outlined in the disability act 2006. Maybe somebody should contact the Equality Authority. Highly embarrassing I should think if found to be true especially given the reason.

  70. Ronan says:

    Looks like you’re right about keeping workarounds shtum. It looks like Myhome removed the Stamp Duty calculator from the property brochure pages. Notta matter. You can easily get the asking price from the mortgage quick quote ad. The ad itself gives you all the info you need to reverse out the price (they have to legally)

  71. Ronan says:

    Another workaround is to spider their WAP site, which can’t use image renderer for the price. It’s got a completely different property ID URL structure and is session based, but it’s workable. Go to http://www.dmwap.com/myhome/ Have fun 🙂

  72. Anonymous says:

    To the guys at myhome who are reading this, your sham artists!

  73. Anonymous says:

    This is all very amusing! I wonder how many developers myhome have trying to counter this. I wonder if any of them pointed out to management that they are fighting a losing battle. I can only assume this was a management decision as any vaguely credible developer would know that they are wasting their time!! The more they try and put up barricades the less usable their site becomes … which plays straight into the hands of daft (which incidently is a much more accessible site).

    Classic ‘technical arms race’ stuff in which myhome can only win by making their site look rubbish and/or unusable….. and then they lose to daft. Love it!!

    Keep up the good work IPW.

  74. Anonymous says:

    Agreed Anonymous. They really are shooting themselves in the foot. Page loads on Myhome are already significantly slower due to the use of images especially for searches. Such irritations are hardly going to endear them to end-users.

  75. anon says:

    Maybe a competitor to the Irish Times( owner of myhome) or other media outlets would be interested in this story. The Times is supposed paper of record and all for transparency etc but this would not cast them in a good light. Note to myhome, give up before you lose the technical,marketing or PR battle.

  76. Anonymous says:

    I sent an email to the Gerry Ryan show and George Hook outling this, hopefully it will be mentioned onair.

  77. Downunder says:

    http://www.examiner.ie/irishexaminer/pages/story.as
    px-qqqg=ireland-qqqm=ireland-qqqa=ireland-qqqid=44159-qqqx=1.asp

    Any comments

  78. jo says:

    Myhome have now also changed the URL structure for their pages, so all those old links to houses on IPW & PropertyPin will no longer work. Ironically, any of their users who have bookmarked houses (using their browser, not using the Myhome “basket”) will now find their bookmarks useless. Congratulations Myhome, you have found another way to frustrate & alienate your users.

  79. Anonymous says:

    October 2nd, 2007 at 3:02 pm
    # anon Said: test

    Me thinks that’s what the MyHome development team need to be doing 😉

    The site really has become unusable when compared to daft.

  80. Beal says:

    Are we to get more reports from IPW or not? Does anyone out there know what the future plans are for this site?

  81. Anonymous says:

    go to http://www.treesdontgrowtothesky.blogspot.com/
    an equally helpful site for property treckinh. Emphasis has shifted to Daft rather than my home. I think the consesus is to let myhome fall into the abyss ofthe VI domain. I think Daft is more transparent, if possible.

  82. Beal says:

    Thanks Anonymous – looked at the site and it’s great.

  83. CiaranB says:

    Had a look at the new price drops site :

    http://www.treesdontgrowtothesky.blogspot.com/

    Excellent – as good as the old one and in my opinion better, as it is based on DAFT exclusively and produced every 5 days! With Myhome being so protective about their data makes you wonder if there isnt manipulation going on there anyway. Daft has a more transparent feel to it.

    goodbye myhome.ie, too stuffy for my taste! Daft is where its at.

  84. Anonymous says:

    you can all jump on me and say i would say that wouldnt I but I am an estate agent and the earlier part of this year has been even tougher than the papers suggested but the market has picked again in the last 6 weeks. I noticed today that the rate of falling has slowed.

    If you look at the fact that €6,000 is the avg price fall over the last 12 months well then anyone who has rented in the hope of a price fall has lost a lot of money. They would have to fall by much more than the rent to make it a more profitable decision to rent.

    Actually it is a very good time to buy for first time buyers becuase most vendors are taking very low offers.

  85. Opus_One says:

    Anonymous – I doubt anyone will jump on you but….. What we are seeing is the early stages of meltdown. What would make you think the rate of falling has slowed ?

    (1) the 6000 figure you are quoting comes from the ERSI so multiply that by several multiples and then add a few more. Even if this figure were true it is always better to rent in a flat market than to buy – when the market is falling (as even the ropey report states it is) then it far far better to rent.

    (2) Regarding your encouragement to FTB’s – what would make you think its a good time for them to buy ? Most vendors are not even getting any offers. If they buy now they are looking at negative equity before they even sign contacts.

    (3) The 6000 fall is a 12 month figure ie it take into account sales that took place 12 months ago ie Aug 2006 when the economy was awash with ssia money and anyine with half a brain went and dumped the money into property. How do you think that figure will look in say Aug of 2008 ?

    Seriously what evidence do you have that the rate of falling has slowed ?

  86. Who's to blame? says:

    We rent a 2 bed apartment for 1,500 Euros which supposidly costs 540,000. To buy it would cost us double what we pay in rent. I say the extra 1,500 every month. In a year it will be 18,000. The apartment I’m renting hasn’t fallen a cent. Guess why. Because the builder and the other flippers haven’t reduced their price yet. 7 available in a 60 unit building. All been for sale for over a year now. Nobody is going to buy cause anybody who would live here wouldn’t be able to get a mortgage big enough. Prices of 3 bed houses in the area are around 450,000. Guess what, nobody is buying them either. Stupid people (people in menial jobs) can’t get big enough mortgages. Smart people know what’s happening and are paying rent anticipating big falls. He He He.
    “Anonymous Says:
    October 4th, 2007 at 6:06 pm

    you can all jump on me and say i would say that wouldnt I but I am an estate agent and the earlier part of this year has been even tougher than the papers suggested but the market has picked again in the last 6 weeks. I noticed today that the rate of falling has slowed.”

    Edited by : Dreaded_Estate

  87. dreadedestate says:

    Who’s to blame?
    All points of view are welcome on this page and abuse of other posters will not be tolerated. I have edited your post.

  88. Realist says:

    I would expect Estate Agents to say that the market is picking up – If they weren’t they wouldn’t be doing their jobs. Just don’t be fooled by them – just be entertained at their sale pitches “interest rates have peaked”, “the economy growing at 4%”, “FTB houses not falling” “blah, blah, blah”.

    Interest rates have not peaked – They have taken a breather until this sub prime mess is sorted out. We will find out if they have peaked depending on how the US & German economies perform over the 6 months.

    The economy is growing at 4% but housing is the least productive part of the economy – All it does it put a roof over your head – it doesn’t put food on the table, it doesn’t make anything – all it does is give you somewhere to crash out at the end of long day & commute from work

    The FTB market is not falling because the Developers aren’t lowering their prices – They are offering incentives instead – fully fitted kitchen, wooden floors etc……They offer incentives because it be bad for business if they had lowered prices – as the fall in prices will be reported – and who wants to buy in a Bear market

    This bear market in property will go on for other 2 to 3 years. If you are thinking of buying – DON’T – wait till 2009/2010 and rent in the interim.

    Auf Wiedersen

  89. ferryshitz says:

    Anonymous – In a flat or declining market it is not wise to buy a property unless you can see yourself in the same place for at least 5yrs – 10yrs. All of the “worth the investment” articles in the property supplements show that rents (as quoted by the agent) will not cover an interest only mortgages. Very few people will dispute that appartments are dropping at a rate of 10 – 20K per year. There is nothing on the horizon in the Irish ecomomy that is going to change that, in fact the gloomsters would say that it will accelerate as the US companies move into eastern europe, the construction boom is over and the Irish corporate tax loop hole gets closed (and it will!).
    So why would I pay more to a bank than a landlord and at the same time see the value of that asset depreciate significantly. Would it not be wiser to invest my savings in a bank (savings or shares) and get a 5-6% return rather than get trapped in a property that I cannot sell for anything close to what I bought it for.
    It is still a good time to sit on the fence, save that 1st time buyers stamp duty wild card, build up your savings and watch for the bargains in 2008 and beyond. That way you might actually buy a house that you are happy to live in for 5-10 yrs.

  90. developer (software) says:

    Thanks for doing this site. We sold our family home recently after realizing the market was going south largely due to this site. We’ll be renting until the market stabilizes to buy again.

    The media in this country should be ashamed of themselves for trying a hide the decline at the start.

    I might be able to help with the OCR on myhome. Are you seeking a solution? if you are please email me.

  91. Who's to blame? says:

    My apologies. I was drunk.

  92. Not a QFA says:

    Anonymous wrote “… the fact that €6,000 is the avg price fall over the last 12 months … anyone who has rented in the hope of a price fall has lost a lot of money.”

    Anonymous, I’m sorry you’re having a hard year but as you said you are an estate agent NOT a financial advisor. Whether or not it is cheaper to rent than to buy is not a simple calculation and I seriously doubt you are qualified to be making that kind of statement. For a start your example is very basic and fundamentally flawed.

    It can occasionally be cheaper to rent than to buy even in a rising market. I would highly recommend that FTBs who can’t see this spend a lot of time educating themselves (unfortunately we’re not taught this in school) before making the biggest financial decision they are ever likely to make.

    Hopefully this link might help:
    http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1&ex=1184644800&en=b3624b89fe38ed22&ei=5070&oref=slogin

    I hope things pick up for you Anonymous but in case they don’t I suggest you take note of what Ronan wrote:
    “Ask any decent economist and they’ll say property crashes are eased by transparent market information.”. Maybe it’s time for your industry to start being open and honest with buyers.

    It’s high time we had public info re: sales prices. IPW is doing a great job BUT it shouldn’t be necessary. Time to bring this country out of the dark ages.

  93. Trust me I'm a VI says:

    I think estate agents have a lot of cheek telling people that prices are rising again when:

    a) They have a vested interest in saying this.

    b) They try and do everything they can to prevent the information that would demonstrate this from reaching the public domain (e.g. myhome mutilating they’re own website).

  94. Beal says:

    If you want to read a really scary story read this about property prices in the US:

    http://biz.yahoo.com/ap/071006/leaving_homes.html?.v=3

  95. Dogdays says:

    Despite the comments of a pick up, there is absolutely no sign of it.

    1) If you look at the Exchequer figures, the collapse in stamp duty is a clear sign of this. However, the property figure may be in fact much worse because the stamp duty figure includes a wide range of other transactions including the issue of shares and other legal documents, cheque books, credit card and other bank related levies.

    2) Debt is increasing at “only” 20% pa. However all expect that this will fall to perhaps “only” 8-10%. Many of those coming off fixed rate loans will find their repayments going up by perhaps 50%.

    3) Many people who may wish to move cannot and will not be able to sell their existing houses. This will be particularly true as the new building regs come into effect. All of the sub standard housing built in the past ten years, particularly flat complexes will be unsaleable.

  96. outwatoef says:

    If you live in Weston Florida and plan on refinancing an existing mortgage or get a new mortgage beware of scam artist Tulio J. Rodriguez. This so called “Mortgage & Finance Specialist” will tell you just about anything to get your business. His group of scavengers “Real Estate Agents and Mortgage Specialists” lie through their teeth to take your money.

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