the daft.ie house price...

Introduction by Ronan Lyons, Economist, Daft.ie

The Daft.ie House Price ReportAn analysis of recent trends in the Irish residential sales market

2012 Q4

IntroductionRonan Lyons, Economist, Daft.ie

Ireland is emerging from one of the worst property market downturns in the post-war

developed world. Economists typically focus on what are termed “real house prices”,

i.e. comparing house prices with prices elsewhere in the economy. Studies show that

severe housing busts are typically long and brought about in large part by higher prices

elsewhere in the economy, and perhaps also a weakening currency.

In contrast, however, Ireland’s housing bust has been remarkably rapid and has occurred

entirely without inflation elsewhere in the economy. And, by necessity, there has been no

devaluation of the currency used in Ireland – which is now continental, not national. In

this sense, the Irish crash looks more like a US city or state – such as Detroit or Nevada –

than other national housing crashes.

Ireland is emerging from one of the worst property market downturns in the post-war

developed world. Economists typically focus on what are termed “real house prices”,

i.e. comparing house prices with prices elsewhere in the economy. Studies show that

severe housing busts are typically long and brought about in large part by higher prices

elsewhere in the economy, and perhaps also a weakening currency.

In contrast, however, Ireland’s housing bust has been remarkably rapid and has occurred

entirely without inflation elsewhere in the economy. And, by necessity, there has been no

devaluation of the currency used in Ireland – which is now continental, not national. In

this sense, the Irish crash looks more like a US city or state – such as Detroit or Nevada –

than other national housing crashes.

End of the downturn?

How can we say that Ireland is actually emerging from the downturn? In one sense, we

can’t. In large parts of the country, particularly in Munster, Connacht and Ulster outside

the cities, there are still the same symptoms as we enter 2013 – rapidly falling prices

(up to 20% in the last year, in some places), a large overhang of houses on the market

and only a small proportion of properties selling in four months, a reasonable time in a

healthy market, for any property to find a buyer.

2 | The Daft.ie House Price Report – 2012 Q4 Continued on next page >

2013: After six years, time to build again?

Ronan Lyons is an economic researcher based at Balliol College, Oxford, where he lectures and is undertaking his doctorate in urban economics. He is also Economist with Daft.ie

3 | The Daft.ie House Price Report – 2012 Q4

Nonetheless, in Dublin in particular, but also in its hinterland and in the other cities, there are a

growing number of indications – many of them contained in this report – that the market in late

2012 is by far the closest to stable in a long time.

For example, this time last year, asking prices in South County Dublin were falling at an annual rate of

22%. In the final quarter of 2012, they were actually 3% higher than a year previously. In Dublin city

centre, prices fell by 25% during 2011 – but rose marginally over the course of 2012. In contrast, asking

prices are still falling rapidly in Munster, Connacht and Ulster. Indeed, for the first time since prices

started to fall, the fall from the peak is greater in Connacht-Ulster (55.9%) than in Dublin (55.4%).

There are some who doubt the relevance of asking prices. And yet, these encouraging signals from

asking prices are repeated across a range of other indicators. For example, this is the first Daft.ie

Report which also includes an analysis of transactions prices, based on the new Residential Property

Price Register.

A major limitation of the Price Register is the lack of information on the property sold, for example

type or size. For roughly 5,000 transactions in 2012, it has been possible to match back to the

original listing on Daft.ie. This enables the like-for-like analysis required to say definitively whether

and how fast prices are rising or falling. And the picture is remarkably similar to what is emerging

from asking prices. For example, in South County Dublin, the annual fall in prices went from 20% a

year ago to just 1% now.

Supply-side issues

Ultimately, prices are the symptom – the outcome of the market process – rather than the cause. To see

what will happen next, we must look to what is happening underlying supply and demand. In relation to

supply, the total number of properties on the market nationwide is at its lowest in five years.

This is being driven by Dublin, where there are fewer properties for sale than at any point since

February 2007. The number of properties sitting on the market has fallen by 50% in the last couple

of years. There is now no backlog of Celtic Tiger housing in the capital. Even in Munster and

Connacht-Ulster, stock for sale is back at mid-2008 levels, although this represents a fall of 20%,

rather than 50%, in the numbers sitting on the market.



Continued on next page >

Similarly, the Dublin market is showing very healthy figures for the time taken to sell a property.

Nationwide, it is now the case that 4 in 10 properties are selling within 4 months, compared to 3 in

10 a year ago. Once again, this improvement is being driven by Dublin, where almost two thirds of

properties sell within 4 months currently. There has also been an improvement in time-to-sell in the

other cities and in Leinster. In Munster and Connacht-Ulster (excluding the cities), there has been

very little improvement in conditions.

Looking to 2013

Looking ahead to 2013, it is clear that the end of mortgage interest relief may have an adverse

impact on the market in the first half of the year. Effectively, some of the demand from 2013 was

stolen and crammed into 2012 instead. Nonetheless, levelling the playing field between buying

and renting long-term is an important step in creating a healthy property market. As is an annual

property tax, which is effectively replacing Celtic Tiger-era stamp duty.

Nonetheless, all the indications are that a balance has been reached in Dublin – and possibly in

the other cities – between supply and demand. With the pull of the cities stronger in the crash, the

Government needs to start planning now for building the new homes the cities will need over the

coming decade. This may sound odd, as property oversupply still blights much of the country, but

the mistakes of the past should not mean avoiding making more mistakes in the future.




The Daft.ie Asking Price Index is based on asking prices for properties posted for sale on Daft.ie. An index based on asking price, as opposed to closing price, is a measure of sellers’ expectations. Figures are calculated from econometric regressions, which calculate changes in price that are independent of changes in observable measures of quality, such as location, or bedroom number.

Daft.ie Asking Price Index

-9.2%Asking prices in the final quarter of 2012 were 9.2% lower than a year previously. The average asking price nationwide is now €171,000, down 54.8% from the peak.


2012 average = 100

Falls in asking prices slow considerably As with asking prices, there was a marked decline in house prices during 2012. While prices in late 2011 were 18.7% lower than a year previously, by late 2012, the rate of prices falls had eased to 8%.

Prices outside the cities and Leinster continue to fallWhile prices in the five main cities and in Leinster look to be stabilising, prices in Munster were 13% lower in late 2012 than a year previously and in Connacht-Ulster were 18% lower.

Flow of properties on to the market falls 18% The total number of properties put up for sale in 2012 (33,600) is 18% lower than in 2011, itself more than 60% below the 112,000 posted for sale in 2007.

Two in five properties sells within four months The proportion of propreties finding a buyer within four months nationwide has risen from 30% a year ago to 39% in December 2012.

Stock of properties on Daft.ieStock of properties on Daft.ie (start of month) and �ow of properties, 2007-2012

0

10000

20000

30000

40000

50000

60000

70000

2007 II III IV 2008 II III IV 2009 II III IV 2010 II III IV 2011 II III IV 2012 II III IV

0

2000

4000

6000

8000

10000

12000

14000

■ Stock ■ Flow

Asking Prices, Residential Sales(2007 average = 100)

January

February

March

April

May

June

July

August

September

October

November

December

2006

183.7

198.6

196.5

201.8

204.1

205.3

207.6

208.7

212.1

212.9

211.2

213.4

2007

212.7

214.6

212.9

213.5

214.8

214.2

214.4

213.1

211.3

210.6

208.9

209.7

2008

209.0

208.1

205.6

204.2

202.1

199.3

197.6

194.8

193.1

189.5

183.5

182.3

2009

180.2

176.6

172.8

171.4

167.9

164.6

162.4

158.5

156.5

154.2

150.5

148.6

2010

149.3

148.0

144.7

144.4

142.7

139.9

136.7

136.6

135.2

132.2

129.2

128.4

2011

127.2

127.1

124.5

121.4

119.9

115.8

115.4

113.6

113.5

108.3

106.0

105.4

2012

105.3

104.2

102.4

101.8

102.3

99.6

98.0

99.0

97.1

98.4

96.0

95.9

The Daft.ie Price Register Index is based on prices for residential properties recorded on propertypriceregister.ie, for which matches were found in the daft.ie archives. Because these are entered with a lag by solicitors, figures for previous quarters are subject to revision. Figures are calculated from econometric regressions, which calculate changes in price that are independent of changes in observable measures of quality, such as location, type, or size.

Daft.ie Price Register Index

-8.0%Prices recorded with the Residential Property Price Register in the final quarter of 2012 were 8.0% lower than a year previously. The average price registered nationwide is now €151,000, 0.9% lower than in the third quarter.


Transaction Prices, Residential Sales(2012 average = 100)

January

February

March

April

May

June

July

August

September

October

November

December

2010

150.4

145.7

145.0

146.2

137.5

142.2

138.8

137.8

133.6

130.5

134.3

132.8

2011

132.0

127.8

120.4

122.5

116.8

116.3

119.8

113.7

112.7

106.7

108.4

107.9

Number of residential property transactions, by quarterSource: propertypriceregister.ie

0

1,000

2,000

3,000

4,000

5,000

6,000

2010 I I I I I IV 2011 I I I I I IV 2012 I I I I I IV

2012 average = 100

Falls in asking prices slow considerably As with asking prices, there was a marked decline in house prices during 2012. While prices in late 2011 were 18.7% lower than a year previously, by late 2012, the rate of prices falls had eased to 8%

Prices in outside the cities and Leinster continue to fall While prices in the five main cities and in Leinster look to be stabilising, prices in Munster were 13% lower in late 2012 than a year previously and in Connacht-Ulster were 18% lower.

Number of transactions recovers slightly The total number of transactions registered in the first nine months of 2012 was 14,000, compared to 12,000 in 2011 and 15,000 in 2010.

Daft.ie Snapshot of Asking Prices Nationwide

What can I ask for? Can I afford it?Average house prices across Ireland, by county and bedroom number, Quarter 4 2012


Daft.ie Snapshot of Asking Prices Nationwide

DublinCity Centre

North City

South City

North County

South County

West County

Meath

Kildare

Wicklow

Longford

O�aly

Westmeath

Laois

Louth

Carlow

Kilkenny

Wexford

Co. Waterford

Waterford City

Kerry

Co. Cork

Cork City

Clare

Co. Limerick

Limerick City

Tipperary

Co. Galway

Galway City

Mayo

Roscommon

Sligo

Leitrim

Donegal

Cavan

Monaghan

€140,020

€127,500

€141,378

€116,531

€185,939

€94,123

€70,646

€77,958

€97,359

€50,627

€56,412

€58,198

€43,381

€64,633

€58,325

€59,587

€55,041

€68,063

€61,513

€65,020

€68,206

€95,185

€59,904

€62,490

€79,151

€60,438

€58,374

€84,690

€57,162

€45,026

€58,673

€45,388

€54,245

€51,044

€57,949

€201,409

€183,400

€203,362

€167,622

€267,461

€135,390

€92,474

€102,045

€127,441

€66,269

€73,843

€76,180

€56,785

€84,603

€76,346

€77,998

€72,047

€87,066

€75,049

€83,173

€87,249

€116,131

€76,629

€79,936

€96,569

€77,312

€66,227

€103,327

€64,852

€51,083

€66,566

€51,494

€61,542

€57,911

€65,745

€250,521

€228,120

€252,950

€208,495

€332,678

€168,403

€112,371

€124,001

€154,861

€80,528

€89,731

€92,571

€69,003

€102,806

€92,773

€94,780

€87,549

€108,735

€95,918

€103,873

€108,964

€148,424

€95,701

€99,831

€123,422

€96,554

€86,333

€132,060

€84,540

€66,591

€86,775

€67,127

€80,226

€75,492

€85,705

€345,239

€314,370

€348,587

€287,324

€458,459

€232,074

€167,046

€184,334

€230,210

€119,709

€133,390

€137,613

€102,576

€152,827

€137,913

€140,895

€130,146

€162,429

€126,698

€155,166

€162,770

€196,053

€142,958

€149,128

€163,028

€144,232

€120,059

€174,438

€117,565

€92,605

€120,673

€93,350

€111,566

€104,983

€119,185

€443,387

€403,742

€447,687

€369,007

€588,795

€298,051

€203,110

€224,131

€279,910

€145,553

€162,187

€167,322

€124,722

€185,821

€167,687

€171,313

€158,243

€183,992

€151,694

€175,765

€184,379

€234,732

€161,936

€168,925

€195,192

€163,380

€129,058

€208,851

€126,377

€99,546

€129,718

€100,348

€119,928

€112,852

€128,119

Leinster

Munster

Connaught

Ulster

North County DublinAverage price: €204,548Year on year change: -4.8%From peak: -53.3%

Dublin City CentreAverage price: €181,220Year on year change: 0.1%From peak: -57.8%

North Dublin CityAverage price: €214,597Year on year change: -3.1%From peak: -56.0%

South Dublin CityAverage price: €232,622Year on year change: -2.5%From peak: -56.4%South County Dublin

Average price: €333,828Year on year change: 3.1%From peak: -53.1%

West County DublinAverage price: €163,156Year on year change: -6.9%From peak: -57.2%

8 | The Daft.ie House Price Report – 2011 in review

Dublin TrendsAn analysis of recent trends in the Dublin residential sales market

■ Dublin City Centre ■ North Dublin City ■ South Dublin City ■ North County Dublin ■ South County Dublin ■ West County Dublin

€100,000

€200,000

€300,000

€400,000

€500,000

€600,000

€700,000

€800,000

How have house prices changed?Average house price by area, 2006-2012

2007 II III IV 2008 II III IV 2009 II III IV 2010 II III IV 2011 II III IV 2012 II III

■ One year ago ■ Previous quarter ■ Current quarter

How fast are properties selling?Proportion of properties marked as sale agreed and withdrawn, 2011 - 2012

How many properties are on the market?Number of properties on the market and newly advertised, 2007-2012


0

1000

2000

3000

4000

5000

6000

7000

8000

10%

20%

30%

40%

50%

60%

70%

■ Stock (LHS) ■ In�ow (RHS)

0%

% o

f pro

per

ties

so

ld o

r sal

e ag

reed

Within 2 mths Within 4 mths Within 6 mths Within 12 mths

n Asking prices in Dublin city were just 2.0% lower in the final quarter of 2012 than a year previously. In late 2011, the year-on-year fall was 22.1%.

n Similarly, transactions recorded on propertypriceregister.ie in Dublin indicate prices fell 6.8% in the year to 2012Q4, compared to a fall of 19.2% in 2011Q4.

n The proportion of properties in Dublin selling within four months has risen substantially from 42% a year ago to 63% now, and is far above the national average (39%).

n The total number of Dublin properties on the market in December was just 3,500, less than half the figure from four years ago and similar to levels last seen in February 2007.


KildareAverage price: €177,642Year on year change: -8.9%From peak: -55.2%

CarlowAverage price: €136,376Year on year change: -13.9%From peak: -50.1%

LouthAverage price: €156,132Year on year change: -11.4%From peak: -59.2%

MeathAverage price: €167,995Year on year change: -10.6%From peak: -54.0%

WicklowAverage price: €224,705Year on year change: -6.7%From peak: -54.1%

WexfordAverage price: €133,457Year on year change: -10.0%From peak: -58.8%

LongfordAverage price: €114,692Year on year change: -8.4%From peak: -59.5%

WestmeathAverage price: €138,245Year on year change: -9.4%From peak: -56.1%

OffalyAverage price: €129,147Year on year change: -12.7%From peak: -56.4%

LaoisAverage price: €102,521Year on year change: -13.0%From peak: -57.9%

KilkennyAverage price: €141,933Year on year change: -9.4%From peak: -55.8%

Leinster TrendsAn analysis of recent trends in the Leinster residential sales market

■ Meath ■ Kildare ■ Wicklow ■ Louth ■ Laois ■ Westmeath ■ O�aly ■ Longford ■ Carlow ■ Kilkenny ■ Wexford





€100,000

€150,000

€200,000

€250,000

€300,000

€350,000

€400,000

€450,000


€500,000

€550,000

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

0

400

800

1200

1600

2000

2400

2800

3200

3600

4000



10%

20%

30%

40%

50%

60%

70%

0%

% o

f pro

per

ties

so

ld o

r sal

e ag

reed


n Asking prices in Leinster were 9.7% lower in the final quarter of 2012 than a year previously. In late 2011, the year-on-year fall was 17.6%.

n Similarly, transactions recorded on propertypriceregister.ie in Leinster indicate prices fell by just 1% in the year to 2012 Q4, compared to a fall of 21% in 2011 Q4.

n The proportion of properties in Leinster selling within four months has risen from 30% a year ago to 40% now, in line with the national average.

n The total number of Leinster properties on the market in December was 11,700, down one third from the level four years ago and similar to levels last seen in mid-2007.


TipperaryAverage price:€142,536Year on year change: -12.1%From peak: -48.7%

Limerick CityAverage price: €144,562Year on year change: -9.3%From peak: -45.6%

Waterford CountyAverage price: €163,51Year on year change: -15.8%From peak: -52.9%

ClareAverage price: €144,043Year on year change: -15.5%From peak: -53.4%

Limerick CountyAverage price: €154,391Year on year change: -12.1%From peak: -45.8%

KerryAverage price: €156,205Year on year change: -13.7%From peak: -49.4%

Cork CountyAverage price: €161,617Year on year change: -13.2%From peak: -55.0%

Cork CityAverage price: €172,750Year on year change: -8.7%From peak: -54.0%

Waterford CityAverage price: €112,864Year on year change: -16.7%From peak: -59.7%

Munster TrendsAn analysis of recent trends in the Leinster residential sales market






0%

10%

20%

30%

40%

50%

60%

€50,000

€100,000

€150,000

€200,000

€250,000

€300,000

€350,000

€400,000


% o

f pro

per

ties

so

ld o

r sal

e ag

reed


0

2000

12000

14000

16000

18000

4000

6000

8000

10000

500

1000

1500

2000

2500

3000

3500

0

20000

■ Waterford County ■ Kerry ■ Cork County ■ Clare ■ Limerick County ■ Tipperary ■ Cork City ■ Limerick City


n Asking prices in Munster were 13.4% lower in the final quarter of 2012 than a year previously. This is largely unchanged from late 2011, when the year-on-year fall was 12.9%.

n Similarly, transactions recorded on propertypriceregister.ie in Munster indicate prices fell 12.8% in the year to 2012 Q4, compared to a fall of 17.5% in 2011 Q4.

n The proportion of properties in Munster selling within four months has risen only slightly from 28% a year ago to 32% now.

n The total number of Munster properties on the market in December was 14,400, down 10% from the level four years ago and similar to levels last seen in mid-2008.


LeitrimAverage price: €98,754Year on year change: -19.9%From peak: -60.7%

CavanAverage price: €119,649Year on year change: -21.0%From peak: -58.7%

MonaghanAverage price: €134,122Year on year change: -20.9%From peak: -58.2%

RoscommonAverage price: €102,005Year on year change: -22.5%From peak: -59.4%

MayoAverage price: €125,773Year on year change: -20.5%From peak: -52.4%

DonegalAverage price: €122,797Year on year change: -18.2%From peak: -54.4%

Galway City

GalwayAverage price: €137,659Year on year change: -19.2%From peak: -57.4%

SligoAverage price: €125,808Year on year change: -17.3%From peak: -55.6%






€50,000

€100,000

€150,000

€200,000

€250,000

€300,000

€350,000

€400,000


0

10%

20%

30%

40%

50%

60%

70%

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

500

1000

1500

2000

2500

3000

3500

0

■ Galway County ■ Mayo ■ Roscommon ■ Sligo ■ Leitrim ■ Donegal ■ Cavan ■ Monaghan



Connacht & Ulster TrendsAn analysis of recent trends in the Leinster residential sales market

n Asking prices in Connacht & Ulster were 19.6% lower in the final quarter of 2012 than a year previously. In contrast, in late 2011, the year-on-year fall in prices was 13.6%.

n Similarly, transactions recorded on propertypriceregister.ie in Connacht-Ulster indicate prices fell 18.4% in the year to 2012Q4, compared to a fall of 17.5% in 2011Q4.

n The proportion of properties in Connacht-Ulster selling within four months has risen only slightly from 23% a year ago to 25% now, well below the national average (39%).

n The total number of Connacht-Ulster properties on the market in December was 14,200, down 17% from four years ago and similar to levels last seen in early 2008.

About the Report

Over the last 10 years, Daft.ie has collected a vast amount of data on the Irish property market. In 2011 alone, over 100,000 properties for sale were advertised on the site.

About the ReportThe goal of the Daft Report is to use this information to help all actors in the property

market make informed decisions about buying and selling. In addition, because it is

freely available, the Daft Report can help inform the media, the general public and

policymakers about the latest developments in the property market.

This is the Daft.ie House Price Report, the partner to the Daft.ie Rental Report, which will be

issued next month. Together, they give house-hunters and investors more information to help

them make their decisions. These twin reports mean that Daft is the only objective monitor

of trends in both rental and sales markets on a quarterly basis, making the report an

essential barometer for anyone with an interest in the Irish property market.

The Daft Report is now almost seven years old and has become the definitive barometer

of the Irish residential property market. It is being used by the Central Bank, mortgage

institutions, and by financial analysts at home and abroad, as well as by the general public.

Methodology and Sample SizeThe statistics are based on properties advertised on Daft.ie for a given period.

The regressions used are hedonic price regressions, accounting for all available and

measurable attributes of properties and only coefficients with a very high degree of

statistical significance (p < 0.001) are used.

The average quarterly sample size for sales over the period 2006-2011 was over 34,000. Indices

are based on standard methods, holding the mix of characteristics constant, with the annual

average of 2007 used as the base. A working paper on the methodologies employed in

both rental and sales markets will be published on the Daft.ie website soon.

Stock and flow statistics are calculated using consistent series for the period covered.

About Daft.ie Daft.ie is Ireland’s largest property website. The latest audited report from ABC (Sep 2011) shows monthly traffic of 130 million page impressions (pages of information received) and 1.976 million unique users per month across Daft Media’s property websites (daft.ie, rent.ie, let.ie, property.ie). This makes Daft.ie the biggest property website in Ireland across all demographics.


DisclaimerThe Daft.ie Report is preparedfrom information that we believeis collated with care, but we do notmake any statement as to its accuracyor completeness. We reserve the rightto vary our methodology and to editor discontinue the indices, snapshotsor analysis at any time for regulatoryor other reasons. Persons seeking toplace reliance on any informationcontained in this report for their ownor third party commercial purposesdo so at their own risk.

CreditsEconomic Analysis:Ronan Lyons

Layout and Design:Ciara Mulvany, Derek Jones,

Flavour 9 Design

Data Compilation:Paul Conroy,

Deirdre Ni Chuilleaneain

Marketing:Kieran Harte

All data is Copyright © Daft MediaLimited. The information contained inthis report may only be reproduced ifthe source is clearly credited.Please contact Daft.ie on 01-4218700for further information.

Coming Next…

The Daft.ie Rental Report 2013 Q1, in ??????? 2013 The Daft.ie Rental Report will be published in July and will include a review of the performance of Ireland’s rental market in mid-2012, plus all the usual indices, snapshots, trends and rental yield analysis, providing analysts, tenants, landlords and the public with the most up-to-date information on Ireland’s rental market.

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