CSO Residential Property Price Index - megathread

Residential down 14.3% year to date, down 1.5% in September.

cso.ie/releasespublications/ … ep2011.pdf

Its frightening how quickly they are falling.

Best case scenario for 2012 is half that but more likely be -10%

Great analysis by NWL here: namawinelake.wordpress.com/2011/ … partments/

Apartments in Dublin are now down 59.2% from peak.
Nationally we are down 44.2% from peak.

The biggest surprise is the large percentage movements month on month. If we are getting near a bottom, which we clearly are not, one would expect that the monthly movements would be for lower percentages.

It is uncanny how accurate Morgan Kelly actually was…

Or maybe the market is ‘aware’ of Morgans predictions and following suit…

Yes. It is Morgan’s fault. The damn cribber.

His prediction was for an overshoot to an 80% fall…so, just over half way there! Nationally maybe, but certainly not for houses in parts of Dublin.

He talked down the economy.

Not an overshoot of 80% IIRC, I think it was 60% with “up to 80% in areas”?

Overall Decline
House prices in Dublin are 49% lower than at their highest level in early 2007 (fell by 1.7% in the month of September and 15.3% lower compared to a year earlier)

Apartments in Dublin are now 59% lower than they were in February 2007 (fell by 4.8% in the month of September)

Residential property prices in Dublin are 52% lower than at their highest level in February 2007 (fell by 2.1% in September)

The fall in the price of residential properties in the Rest of Ireland is somewhat lower at 40% (a fall of 1% in September and 14.3% in the year to September)

Overall, the national index is 44% lower than its highest level in 2007 (fell by 1.5% in September)

The index is 44% but on the ground figures are much lower. In places, properties are selling at a 70% discount on the peak 2007 levels.

60-70% decreases, 75% and higher for trophy homes
Even sherry fitz admit this, so why are we still referring to 50% fails???
with so little sales outside the major urban areas its hard to calculate accurately for rural areas

As long as Priory Hall is still in the news I would say that the market for apartments will be even worse than it has been over last couple of years. If one or two more Priory Halls are discovered then there will be no market for years to come for apartments built over the last 10 years.

irserver.ucd.ie/dspace/bitstream … ap_001.pdf
Can be worth re-reading sometimes.


irishtimes.com/newspaper/fin … 20759.html

In real terms means inflation adjusted.

So if your starting point is 2007, and say inflation (CPI) is 4% for annum for the next five years (2007, 2008, 2009, 2010, 2011)…then if house prices have hypothetically moved 0% over those 5 years, then in real terms they have fallen by 22%.

if house prices drop 60% in those five years, and cpi is up 22% in those five years…then in real terms…not quite sure how its calculated but the drop is more than 60%…


Sherry Fitzgerald are hardly neutral commentators. For the last couple of years most of the estate agents have been spinning the same story, which is that the big price falls have already happened. That sellers need to reduce their prices if they are to have any chance of selling. And that buyers can buy now, secure in the knowledge that the big falls have already happened. You can read this sort of spin every week in the property supplements of the newspapers, and some of the estate agents even produce their own index to back up their story that the big price falls have already happened. I don’t know too much about their index, but a nice thing about it is that it gives us the answer that both we and the estate agents want: there have already been big price falls.

The reason that we’re still talking about 50% falls is that every month the CSO looks at the prices of property that sold in that month, and every month they come back with the wrong answer. The answer they come back with is that average house prices have fallen by a lot less than 60%-70%. Nobody in the CSO is suggests that the prices of some houses have not fallen by 75% or more. And nobody in the CSO suggests that house prices in particular areas haven’t fallen by 60%-70%. But what they do say is that when you actually look at the real numbers and take an average across the country, you come up with a figure more like 43%. And if you look at average falls in house prices across the whole of Dublin, you come up with a number of around 50% rather than 60% to 70%. This is all within the limitation of a sample that covers many, but not all, property transactions, and which at any time is a few months out of date.

Obviously it is heresy on the 'pin to suggest that the CSO index is anything other than fundamentally flawed. It is an article of faith among many on the 'pin that it drastically underestimates the true price falls, and I certainly respect that position.

But I suppose the reason that we’re still talking about 50% price falls is that the CSO keeps coming back, month after month, with more or less the same wrong answer. At some stage a few crazy people are going to start wondering whether the CSO haven’t actually got it right.


HICP is probably a better measure to use than CPI in terms of real prices. In terms of house prices, I think wage inflation shows a stronger correlation between the two than broader price inflation.

Dublin apartments down over 10% in past two months. A long winter ahead.