We need Daftdrop and Collapso back!
Another example of a hidden price drop here. During the 2007-2011 crash, this is the type of estate is where I noticed price drops starting (late 2006) before the market fell more broadly:
Current asking price: €375,000
Previous asking price (July 10th): €385,000
At least they haven’t gone back to the trick of replacing the text of the price with an image like they did a decade ago to thwart data scrapers.
I’ve been keeping a weekly eye on Dublin median asking prices (my home) and selling prices (PPR) since May last year.
Asking prices have remained stubbornly close to 395 all year - they float in a small range - the lowest was 390 and the highest 400. Selling prices started at 335 in May fell to 325 in June, slowly ticked up to 340 in December , took a leap to 360 in January, stayed there to May, gradually fell off to 350 in August and are now back up to 360.
House prices tend to ‘crash’ over a long period. I remember looking at the 90s London price crash statistics and realising that the quarterly falls were very small ( the largest being 3 or 4% and generally in the 1-2% range). It took 6 years for the market to get to it’s bottom in the last crash here. It’s the cumulative effect. House prices are sticky on the way down - remember that most people don’t have to sell or buy, it’s their home. Cheap money fuels ambition on the way up - people want a ‘better’ house - the cheap money reduces their perception of risk in the transaction. On the way down , there appears to be more risk (you might sell your house and the market might rise before you buy again, or you might buy and find you can’t sell for as much as you thought) and that risk is the same as on the way up but nobody is pumping money at you to make you feel that risk is reduced. Also the economy is probably in the toilet when all this happening.
In 4 or 5 years time you might be back at 2014 prices. I still think 2014 prices are about 25% overvalued compared to other housing markets (and Ireland in the past) but that is the premium that Irish people appear to be prepared to pay (and credit institutions are prepared to support).
The Dublin market splits into sub-400k (60% of sales), 400-700k (30%) - 10% for the rest. Sales of million plus houses tend to be about 40 a month and it’s pretty constant - if you’ve got that kind of money it seems you’re immune to the market forces.
In the ordinary run of events this makes perfect sense. But in a post Covid world where WFH has changed the game for many theres a strong possibility of things taking a sharper turn this time round.
One could also make an argument that WFH will increase demand for (certain types of) residential property?
Logically, one would expect price drops, but it is not happening (yet) based on the actual sale price data available.
True. I defintely think lockdown concentrated a lot of minds as to the value of gardens ie the 3 bed semi is not to be sniffed at.
I do think it could end up killing or damaging the idea of city living and apartment dwelling in particular, especially of the quality we build in Ireland. Commuter towns may benefit.
65 Woodlawn Park Grove, Firhouse, Dublin 24
Asking Price September 2020: €370,000
Sold Price September 2012: €280,000
Link to property on MyHome here: https://www.myhome.ie/residential/brochure/65-woodlawn-park-grove-firhouse-dublin-24/4452311
The June 2020 CSO Residential Property Price Index stated that “Dublin residential property prices have risen 91.4% from their February 2012 low”.
Shouldn’t this property have an asking price in excess of €500k based on the reported price increases in Dublin over the past 8 years?
Way to get yourself banned mate…You know this forum is full of real estate agents blowing wind up the market??
Like you - I think prices should fall. That doesn’t mean they will fall.
But asking prices don’t mean anything - you’ve got to look at sale prices.
And - surprisingly (so far) - sales prices are holding up well, and are up in certain places. That is a fact - it can be seen in the data.
I don’t think I really have an opinion (at the moment) either way on whether house prices are too high, too low or about right. I’m primarily interested in signals that point in either direction and to then see if they are shown to be correct when the actual data comes out in 6 to 12 months time.
At the moment, all the signals appear (to me) to be showing a very real and significant price fall over the next 12 - 24 months and with continuing and sustained price falls over the following ten years.
I could be wrong.
That sounds like an opinion to me
You got me. Of course I have an opinion (of sorts) and sometimes it may come across as a strong opinion but I’m very open to changing my opinion very quickly in either direction. But, in general, I’m primarily interested in the signals.
I should have probably changed the line “I believe” to “I believe the signals show”. I’ll try to be more careful with my language going forward.
There are many signals - and solid economic logic - that would suggest there are (significant) price drops on the horizon.
But we need to see the data before we can come to conclusions.
Anecdotal observations earlier in this thread from other Pinsters looking to buy now - or recent buyers - would suggest that there is still strong demand for family houses in the Dublin region. I’ve heard from bank employees and solicitors that they’ve never been busier processing new mortgage applications & approvals.
Again, this is anecdotal evidence - as are your constant examples of asking price drops.
We need to see the actual sales data to understand what direction the market is heading. The data available so far shows a (surprisingly) resilient housing market.
Maybe. But I think “anecdotal evidence” of “I know someone in an estate agency, bank” etc. is not as strong as the “evidence” of asking prices, which are real signals as to what an estate agent/ seller truly believes a property is worth. Too high an asking price and they get no interest. Too low a price and they get people who couldn’t afford the price a seller is really seeking and the estate agent/ seller would be wasting everybody’s time (their own included).
Read the multiple posts from active buyers earlier in this thread
I doubt they have any personal agenda (nor do I) to talk up the property market - they are just telling the story of what they are experiencing
Personally, I would like to see prices drop to a more affordable level…but unfortunately I’m not seeing it in the data yet!
Maybe. But,of course you’re not seeing that in the data yet. There’s a 6 - 12 month time lag.
Asking prices are based around the price the estate agents/ sellers believe the properties are worth. Too high an asking price and nobody calls. Too low and they get people who can’t afford them anyway.
Asking prices are a marketing tool. People purposefully set them too low all the time (for years and years agents set Auction AMVs miles below what the actual value was) and at certain points in the market cycle, people also price stuff too high if there’s a general market expectation that things are “generally” selling for X% below asking in order to leave room for that.
Take this one for example, on the market a few weeks now:
Advertised at €295,000, bidding was nearly 20% above that after no time (not sure how high it went). The agent and seller did not believe it was only worth €295,000, it’s a marketing ploy. There’s a slightly larger 3 bed on the market on the street for €495,000.
There are lots of examples of this. Pricing low is a marketing strategy that results in competitive bidding scenarios and often good sales results so unfortunately the assumption that nobody under prices or over prices is flawed.
Maybe. But the “evidence” you’re providing is “anecdotal”. Why is it still advertised at €295k, if, as you say, the bids are now 20% higher? Maybe it will achieve the price you say it will.
In relation to your theory “Pricing low is a marketing strategy that results in competitive bidding scenarios and often good sales results so unfortunately the assumption that nobody under prices or over prices is flawed.”
I agree some estate agents will engage in those tactics and it makes sense. However, a quick look at the price changes on MyHome.ie over the past 12 months will show that most estate agents appear to setting asking prices on the higher rather than the lower end given that most price changes appear to be reductions in asking prices and not rises in asking prices.
Also, I don’t believe many couples will wake up tomorrow morning and decide they’re going to buy a house on Monday morning for €500,000.
What generally happens is that they spend 3 to 6 months researching the market and they base the amount they’re willing to spend on the prices they see advertised during that period and what they believe to be fair market value during that time period.
Then, they make bids and by the time the whole process goes from sale agreed to the solicitor registering the sale with the revenue commissioners and included in the property price register, it’s about 6 - 12 months later.
They’re the prices we see in the property price register. The prices in the property price index are basically reflective of a market that existed 6 to 12 months previously.
This probably explains why the property market falls, at first slowly, and then with a collapse.
“However, a quick look at the price changes on MyHome.ie over the past 12 months will show that most estate agents appear to setting asking prices on the higher rather than the lower end given that most price changes appear to be reductions in asking prices and not rises in asking prices”
I have noticed this too - and it also makes sense as low balling asking prices leads to open viewings with 30/40 people milling around a property - something that is not possible at the moment. I also have wondered if Dafts recent asking price report which pointed to a rise in asking prices might be explained by this shift in strategy.