CSO Residential Property Price Index - megathread


#2181

For Dublin houses: First 5 months of 2016 far outstrip first 5 months of 2015 in terms of percentage increase… and that’s off a higher starting base.

I think it’ll be frightening once the increased-deposit cohort and the end-of-2-year-rent-freeze cohort start looking to buy in 2017. That could spur further Dublin house price increases.

…that’s assuming some weird event doesn’t impact the general economy… like, I dunno, something mad: our nearest neighbour suddenly deciding (based on zero objective reasoning) to leave the EU, and this precipitating the slow collapse of the EU…
:-GC


#2182

2015 first five months goes from 86.9 to 87.6, or 0.7 points increase
2016 first five months goes from 89.7 to 92.6, or 2.9 points increase

Both are extremely small though.


#2183

+1
I agree - I just worry about the momentum.
If there’s a 5% increase over 12 months (and that looks conservative for 2016)… that’s 20k on a 400k house in Dublin.
I don’t know many people on salaries where they aim to buy a 400k house in Dublin, who can afford to save 20k in a year.


#2184

Leverage mostly “solves” that problem.

If they’re maxed out on LTI and LTV (and assuming neither was exempted) they would need a 5% payrise for the LTI and another 4k deposit for the LTV.


#2185

You should not compare changes in raw index numbers.

Obviously with small changes it makes very little difference to using percentages.

Not something I would be teaching the kids however.


#2186

Index numbers are exactly what you should compare. That’s why they exist, instead of posting the underlying data. To make it easy to compare them.


#2187

I agree - surely the raw data numbers are the cleanest way to illustrate the changes… which is why it’s the ‘raw data’. Unless I’m missing something?


#2188

Of course you can compare index numbers but it is not economically meaningful.

Say the price of cheese is indexed to 100 in 2007 and has the following dynamics

2007 100
2008 250
2009 260
2010 410

The index increased by 150 points (year on year) in both 2008 and 2010. But the base is different. 2008 saw a 150% increase but 2010 saw only a 58% increase.

If you are still in doubt raise all these numbers to the power 2 and try again. For example an increase of 1 million Zimbabwean dollars in the price of toilet paper before and after a bout of hyperinflation had very different implications.


#2189

But just think how much houses will be worth in Punt Nua (emblasoned with a picture of Enda on one side and that half-finished Anglo building on the other)!


#2190

It all depends on how the index numbers are derived from the raw data. It may not be appropriate to compare % changes instead of numerical changes. Not sure in the case of the CSO index; I can’t remember. It could also depend on which sub-index since some of them are averages and some are not.


#2191

I am glad to see you agree with me:-)


#2192

I know - a percentage is only meaningful if you understand the base number.

Am I right in saying the CSO base number is always: 100 at Jan2005? And so any “percentage change” we are seeing is the rolling average house price actual change baselined to the Jan2005 price?
Or am I interpreting that incorrectly from the CSO site?


#2193

CSO Residential Property Price Index – May 2016 & Overall figures:

cso.ie/en/releasesandpublica … exmay2016/


Caveats:

  1. The above stats are for Mortgage Transactions only as Cash Transactions are still not included.
    Per the official PPR there were 48,704 Property Purchases in 2015 as at 29/6/16.
    Per BPFI there were 26,031 Mortgage Drawdowns in 2015. See here for details viewtopic.php?f=4&t=26451&p=814001
    Therefore 46.6% of all Sales were Cash purchases in 2015. This figure will increase as the PPR is updated during 2016.
    This compares to 50.6% cash sales in 2014 and 52.3% in 2013.

Every CSO report from February 2013 to May 2016 has stated “The CSO is currently examining Stamp Duty returns to the Revenue Commissioners, made via the Revenue Online Service (ROS), with a view to assessing both the extent of cash-based full market price transactions and any potential bias in the RPPI that might accrue from their exclusion.”
We still await the results of this obviously in-depth report.

  1. The number of transactions per quarter is still not disclosed by the CSO, despite the new Property Price Register being available since 30 Sep 2012. So if there are relatively few sales in that period, this can lead to large drops or rises, thus skewing the results.

  2. This index, based on mortgage draw-down data from IBF member banks, is a lagging indicator of the Irish mortgage market. These houses were probably Sale Agreed 3-6 months ago, depending on how long it took for the sale to go through. So it may no longer be reflective of current market conditions.


#2194

Dublin down -1% for houses and -0.5% for apartments
Rest of the country up by 0.5%

cso.ie/en/releasesandpublica … xjune2016/


#2195

Big news:


#2196

TheJackal will have to amend its boilerpate moan about stamp duty returns and cash transactions. :smiley:


#2197

Working on it :laughing:

Good to see. With 50-60% of annual purchases via cash lasy few years, the index will in theory be statistically stronger come September


#2198

I wonder if we might see a massive one month change due to the inclusion of such data suddenly?


#2199

Some details from their PDF: they’re going to match stamp duty returns to BER reports in order to match physical characteristics of properties (presumably size, number of bedrooms etc). This leads to the obvious question of how they will account for exempt properties. Is there a danger that the new index will be skewed by this?

Also it’s disappointing that the new index will replace the old one, thereby making historical comparisons impossible. Surely they should run the two in parallel for some time? Or maybe they’re running the new model backwards 12 months? Will be interesting to see.


#2200

I know I’m picking my points here but Dublin house prices are down 0.6% since October. Have we reached a maximum for Dublin now based on affordability with the CBI rules?