The CSO has just released a new residential property price index, which is based on total transactions from Stamp duty returns, as opposed to data from mortgage lenders. The latter was only capturing around half of total transactions, so the new index is more representative of the housing market as a whole as well as providing a host of additional information , including price and turnover trends at a regional and localised level.
The inclusion of cash buyers ( or more precisely, buyers who are not being funded by Irish mortgage lenders) has not greatly altered the perceived picture of the housing cycle, although there are some modest differences revealed. Prices are now seen to have peaked nationally in April 2007, five months earlier than previously thought, although still bottoming in March 2013. The decline is now a little steeper, however, at 54.4% againt 50.9%, primarily due to a bigger fall in prices ex-Dublin; the crash there is now put at over 56% against 49% on the old index.
Cash buyers appear to pay less than buyers with mortgages and the new index shows that the recovery has been a little weaker than previously perceived, albeit not dramatically so; national prices in July 2016 were 3% below the index based on mortgage data alone. The divergence is not material in Dublin (less than 1% in June) but is pronounced elsewhere in the country, with the new index 8.4% below the old.
What about the recent trend, now that the Central Bank’s mortgage controls have bedded in? What is apparent is that prices in the Capital have slowed appreciably since last December and were flat in the first six months of this year, with monthly falls alternating with modest gains. Prices did rise in June and July, by a cumulative 2%, so boosting the annual change to 3.8%. Dun Laoghaire/Rathdown has fared the worst ( +1.1% over the past year) with Fingal ouperforming (+6.4%).
Elsewhere, the market is more buoyant. Prices ex-Dublin were broadly unchanged over the Winter and early Spring but then accelerated, rising by 6.7% in the three months to July, boosting the annual increase to 11.3%. There is a regional divergence however, with prices rising by just under 19% in the Midlands and by some 15% in the South West against 6% in the South East and 4% in the Mid East.
Prices in the Capital are still well above the national norm, of course, at an average €385,000 versus €236,000 according to the CSO, which is common feature in many economies. Dublin also significantly outperformed the rest of the country in the early years of the recovery but that now appears to have ended, with some modest catch-up underway.