Daft Report (Jan 2010) - House prices fell 19% in 2009

rte.ie/news/2010/0107/housing.html

I’ve updated the title of this thread to add in that it’s the daft report.

Here’s a link to the daft report website: daft.ie/report/

Full report in pdf here (1.27Mb): daft.ie/report/Daft-House-Pr … 4-2009.pdf

Press release: daft.ie/news/2009/daft-house … -2009.daft

(later)

(later)

Alan McQuaid of Bloxham Stockbrokers writes…

Lower prices don’t really benefit anybody, on the other hand huge loans are great.

Newstalks summation of the report this morning was:

“There is a lowering of supply in Dublin which could lead to a stabilisation in prices”

2009 - “easing” is the new falling

2010 - “stabilisation” is the new easing

Now for the love of God, next time, Alan McQuaid says something you lot get excited about it, will you please remember this tripe? :unamused:

I’ve put some more thoughts up on my blog:
ronanlyons.com/2010/01/07/as … -in-value/

In addition to national and regional headlines, I’ve also:
(1) updated my estimate of the total value of residential property in Ireland (now €180bn off peak values)
(2) expanded a bit on my prediction (here) of a further 15% fall in prices during 2010, including my closest flirtation yet with calling a bottom!

That’s some shite alright. What did folk on here get excited about before in relation to this guy?

I’ll give ya 2 guesses…

Bloxham Stockbrokers I ask ya… I’d have more time for Paddy Power’s Chief Economist…

Where do you see the rental yield finishing off Ronan?

I would have thought in the region of 5.0-5.5% because:

  • That will be slightly above the expected medium-term interest rate in a eurozone with a slow long-run growth path
  • That means a real return, after inflation, of about 3%
  • 3% sounds about right, given long-run macro average real returns of 1% for bonds and 7% for equities - property is not as risky (in general) as stocks, but not as safe (in general) as government debt
    Any strong opinions for significantly higher? Lower?!

Incidentally, by that logic, Dublin city centre doesn’t have too much more to go, assuming rents level off in the next quarter or two. Its price falls have been significantly larger than its rent falls, plus its yield was higher than most parts of the country to begin with.

That presumes we’re done with wage deflation and based on your own prognostications for finances 2015, don’t see that as a runner really.

What are yields currently at approx in Dublin? I would have thought approx 3.5% (max 4%).

Can’t see that happening.

+1

5% is definitely too low Ronan and even 5.5% is probably too low. I would say yields needs to finish above but close to 6%.
Otherwise there simply isn’t a return for BTL landlords and even at those levels it wouldn’t be a decent investment.

Why do you think rents will stop falling in Q2?
The stock of properties is still only slightly below the all time peak and in places like Dublin it has started to climb up again.

Allow me to refer you to page 10 of:
daft.ie/report/Daft-Rental-R … 3-2009.pdf
Average in Dublin city centre is 4.6%.
Average country-wide is 3.4%, but 4.1% for 1-beds.

Thanks. Wasn’t aware of that :blush:

It is a bit mistaken to compare the yield from equities - mix between divs and capital gains taxed differently - to the rental yields from property - taxed as income.

In practice yes, but in theory no!