South Dublin prices 2001

Came across this page from Terry Halpenny’s website (estate agent in Blackrock) from 2001. It includes many addresses of interest to myself and the husband when we do buy, and if nothing else it has reassured me that we have a loooong way to go yet. I’m sure others can empathise with us being sick of renting, especially with a new baby…


Ok, I have not gone through the whole list but I’m very familiar with the area generally, and have found an almost exact equivalent. So let’s cast a cold eye over the proposition.

Direct equivalent: … XPGE350711

The maths:

It’s fair to say it got the asking, thus:

2001 Price:
IR£425000/.787564 = €539638

Now inflation …

I’ve discounted 2001 as year of purchase and 2009 as deflation @ roughly 4% so no net inflation for 2008.

So the Real Price figure is:

Direct equivalent now asking €695k.

I’ll buy you several of your choice if this one makes €650k today, and that tells me this area is back to Y2K prices and possibly 1999 prices.

1 more year should see the full retrace [to 1996 Real Prices] complete. Maybe there’ll be an overshoot - definitely given the likelihood of inflation in the medium term.

An old friend of mine is Duplex’ graph from many moons ago …

irish-property-bubble.blogspot.c … -2005.html

Quod Erat Demonstrandum. BD

P.S. Love the handle … :smiley:

Back then, things were getting the asking - even if it meant waiting. Now, who knows what discount they are going for.

Not to be argumentative, but why can’t some people on the PIN not get a couple of things. a) For many people who don’t read the PIN - and that’s a lot of people - there is a considerable amount of emotion attached to buying a property, they don’t think with cold hard facts. b) Things change - Why should property prices ever go back to ‘historic’ multiples or any other measurement that you choose. Things change and as the years go by they seem to change quicker. We may never see the 2.5 + 1 again. House prices may fall back to 1970 prices… who knows? But comparing today’s prices to previous eras makes no sense.

True. Fortunately, the banks are now reverting to their traditional value of protecting themselves and thus the borrowers.

Oh, you know most people who post on this site are hopeless optimists who havnt yet acknowledged just how bad things are going to get. In the meantime, no harm in looking at legacy valuation metrics. :smiley:

Don’t disagree about the emotional investment aspect of buying a house. That’s where the no glee policy is right.
However there is a level where property prices, and therefore costs to the economy, of doing business get out of kilter. It may be the increasing cost of small business’s ( like mine was :neutral_face: ) being unable to compete with imported good because of continuing rent increases coupled with increasing insurances (as a percentage of property value). Coupled with increasing wage demands to pay for the increasing cost of private property… Coupled with the need for both parents having to work to pay for the … Do ya get the drift? :neutral_face:

They ecomomy became unbalanced several years ago and fools like me who mentioned it were laughed at and it came to the point where even I doubted myself. With all the VI spoofery and political ineptitude loaded against people I am not surprised that some are angry, as you seem to be. I don’t want an argument either… But I would like people to wake up to common sense. To compete in this global world we must get back to prudent sensible levels which is where most posters here would like us to be… So I hope that makes sense.

I don’t disagree, but it’s the constant comparison to past prices that bothers me. You cannot compare current prices with past prices… it was a different world. As I said in my post, prices could go back to 1970’s level, who knows? I’ve preached to anyone who would listen (and there weren’t many) over the past ten years, that things were crazy and unsustainable, but they are never going back to the same guidelines and measurements that used to be applied. That’s gone, forever.

Historical comparisons are a vital when it comes to predicting asset prices. We need to look back to more ‘normal’ times to determine an appropiate level for house prices. I don’t see how you can try to judge value without some sort of historical reference.

I do not agree that we are never going back to the same guidelines. In fact I am pretty sure that we are.One of the reasons why things became so crazy in Ireland was because traditional lending metrics were ignored. We are already seeing banks return to more sensible (i.e., traditional) lending policies (when they do actually lend that is).

Comparing prices to historic norms is useful expect when the fundamentals have changed but Dublin of 15 yeas ago is very different to Dublin now.

I’d suggest allowing for some of the following:

  1. The people buying in these areas now are couples with professions. If you want to go back to the 70s you’re looking at a time where a women had to leave the workforce when she got married thus reducing the income available to finance a mortgage. We will not go back to the same multiples used back then.
  2. People now marry later and have fewer kids and as such costs, the place in general has become a hell of a lot less laid back than it used to be. I’m late 30s and have very few friends of my age with more than 1-2 kids. Our parents seem to produce them by the dozen.
  3. The population of Dublin is now significantly higher than it was 15 or 20 years ago (even if there is emigration this year) and thanks to Dublin city planners who were insightful enough to build out rather than up numbers of properties similar to the ones listed here have not increased.
    4.The overhang of properties constantly referred to is not in these areas. Factor in an abysmal transport network leading to massively increased traffic congestion and the premium for property close to schools, work, shops etc increases further.
  4. Linking the prices as you have to inflation is the wrong way to do it, if you are looking at salary multiples to finance purchases, as you are, then you should be linking prices to salary inflation which will have run a few % higher each year than inflation.
  5. Banks are lending to what they view as good risks. Friends of mine have recently gotten mortgages of 5-6 times joint incomes and these are the people, each a professional, that will be looking in these areas. Parts of Dublin have always commanded a premium and always will. To use a flat rate per square ft as some people on this site do is ridiculous.

Sellers can and continue to compare to past prices - namely 2006. They are willing to dismiss any other era except this one - nothing emotional about that it’s simply denial. We still have the mindset in this country that it’s just a blip - it’ll be grand - I hear it all the time from friends. I have guided them to this site - but because the message is not what they want to hear (with the couple of exceptions) they ignore it. They’d be happy to go back to the 70’s - if they could profit from it or pay their NE.
I agree with you somewhat that things have changed - forever, we may not go back to historical lending practices of the 70’s 80’s etc… But we will also never go back to the practices of 2002 - 2006/7.

That sounds sensible to me but both earners need to continue to work to pay the mortgage.

No argument there. I think that large families are now the preserve of the very rich or the very poor. The middle classes can no longer afford to have that may kids.

OK. So there is a premium for this part of the world. Again I agree. I grew up on DNS but if I moved back to Dublin I would prefer to live in one of the nicer south Dublin suburbs. But as it stands, some of the nicer south Dublin suburbs are still very expensive places to buy property and I live in one of the nicer London suburbs. Comparing my middle class enclave with the Dublin equivalent still makes London look cheaper (and London prices are still well overvalued).

True, but this has probably always been the case with certain areas. The problem was that the premium during the boom years lost all touch with reality. Ordinary houses were commanding extra-ordinary prices by virtue of their address. Again, this is normal for the premium areas in any city but the funny money is now gone - and gone for at least a decade. Moreover, the over-supply of properties is most acute in the ring of so-called commuter towns around Dublin. Prices here will be savaged but don’t think for a second that this will not impact prices closer to town.

But now salaries are shrinking and the tax burden is rising. Salaries cannot forever outpace inflation, otherwise we will end up paying €100k to postmen.

I would submit to you that on average, there will be a lot less credit available to people who want to buy houses. Lending someone 5/6 times their income when nominal interest rates are at multi-decade lows is not a good risk. I have a joint mortgage with my wife and we borrowed approx 2.2 times our joint and we still worry about the mortgage.

SCD is a nice place to live and will always command a premium. However, almost a decade of madness has distorted our understanding of both value and risk. Looking back at more normal times is a good place to start when you want to try and determine a reference level for property valuation.

Okay fine. You have repeated that in this and other threads over and over again. Now can you tell us WHY you think lending practices will not revert to same measurements and guidelines.The two people working per household will change, there are not and will not be enough jobs to go around, so the one parent at home will again become normal.Maybe you have a different outlook for Ireland,if so, pray tell. I think you are being optimistic. The only reason two people HAD to go to work, was to pay the mortgage and they were convinced this was normal.Kids in creches,never seen by their parents, how is that all going to turn out. It’s a social disaster.
If you are going to repeat that prices will not go back to pre bubble multiples of salaries then please explain WHY you think that instead of just saying it.

Proximo, SHE-ra

very insightful posts.

Proximo- good analysis - some quibbles though - Looking at duplex’s graph: irish-property-bubble.blogspot.c … -2005.html
applying a 10/20 % discount on todays asking price for 37 hollypark avenue would get you back to somewhere in 99/00 - probably closer to 00.

However this 99/00 price is at least double the 96 price from the graph - and I don’t see another 50% fall in one year - surely its going to take at least 2 years to achieve this fall? - is there any reason you think its going to happen in one year? (given that the current 50% falls have taken about 2 years).

Sorry, don’t know how to do that quote thing:

Ivor Lot - “The only reason two people HAD to go to work, was to pay the mortgage”

I disagree with you there. Both myself and my wife work, we worked before we married we both continue to work because we enjoy are careers which neither of us wish to give up, it has nothing to do with having to pay the mortgage. If our mortgage was paid off tomorrow we’d both continue to work. As I said, times have changed. That was my point about people marrying later. By the time they marry most couples will have begun careers that they wish to continue.

Johnboy - salaries, on average, should outpace inflation as countries grow in real terms. My point there was that if people are going to pay the same % of salary for a good then the cost of that good will be linked to salary growth not inflation.

Sounds like that was a choice then. Most people did not have that choice.

This is not a swipe at you but many people have put themselves into the position of having no choice. The took out huge morgtages, bought new cars, moved into their house and bought a new kitchen and had to have new furniture.

When I moved into my house I think my cooker was third-hand, the washing machine was from SVDP and the couch was from my mates mothers house. Two years ago a lot of people wouldnt be caught dead doing that.

Property values rose to take advantage of double incomes. It was not the other way around. It became necessary to have two incomes for a mortgage later. The ‘normal’ rules about borrowing are as out of date as unions and collective bargaining. The world has moved on. banks will be less willing to lend but they will still look at potential customers on a case by case basis rather than imposing some blanket nonsense such as 2.5 + 1. I have never indicated that I am optimistic, so I don’t know where you get that from.

IMO people in their thirties (me included) are not as selfless as their parents. it is not a question of not being able to afford more than two kids but two kids is manageable and allows new car, holidays, clothes, toys, that one might have to cut back on with 3 or 4 kids

If you get married in your thirties you are used to a reasonable standard of living that is hard to totally give up when you have kids so you make some sacrifices obviously but are probably not going to want to give up all the luxuries

also in SOCODUB there are a lot of people who assume that they are going to have to spend a lot of money on their kids education

OK. But Irish salaries are shrinking and have much further to shrink if there is going to be any hope for the economy. The tax burden will most likely increase and remain at an elevated level for quite some time.

Moreover, salary is not the sole determinant of house prices. Credit is pretty important too and a salary increase of say 3% will not offset a sharp reduction a lending multiples. Add in an eventual normalisation of interest rates at say 4%-5% and suddenly historical parallels are very important.

Not too sure about that. Do you think people get accustomed to a high standard of living during their twenties. I thought it would be the opposite :slight_smile:. I know my twenties were spent either getting educated and traveling, then living at home for a while. Perhaps people get accustomed to living at home these days.

Do you have any proof that there are a lot of people in SDCC that are going to be spending money on their kids education, it sounds like a wild claim Im afriad.