The new house price register offers early positive indicators about the market, and invaluable information for the future
THE NEW property price register has been hailed for bringing transparency to a market which has been riddled with “spoofery” for decades. While it won’t fix the sector overnight or remove boom and bust cycles it will equip buyers and sellers with much needed information and make accurate trend-spotting easier, experts have said.
An early assessment of the register’s data offers positive indicators that the property sector has stabilised, with the number of houses being sold so far this year up significantly on last year but that is not to say the market has suddenly returned to good health. Far from it.
The Central Bank warned yesterday that it could take nearly 20 years for the market to recover and the register shows that transactions are more than 80 per cent off what they should be in a properly functioning market.
However, the downward spiral that reached its nadir in 2011 appears to have been reversed and with sales increases, property prices appear to have also risen – by more than 1 per cent this summer, with desirable areas seeing a sharper spike.
The increased activity has been particularly noticeable in Dublin where there has been a 45 per cent increase in the number of sales when compared with the first nine months of last year. Up until the end of last month 4,774 houses were sold in the capital compared with 3,295 over the same period last year. The number was 4,562 in 2010.
The rise in the rate of transactions is repeated in other urban centres. Between January and August this year 603 properties sold in Galway compared with just 501 in 2010 and 604 in 2010. The 2012 number in Cork was 1,429, compared with 1,204 last year and 1,419 in 2010.
The managing director of DNG, Keith Lowe, said the increase in transactions seen on the register backs up what his agents are reporting. “There is a change in sentiment and a lot of renters are getting nervy,” he said. “You also have many first-time buyers who want to jump before the end of the year to take advantages of tax relief which will be worth up to €7,000.”
He cautioned that severe problems remained and will have to be addressed. “The real stumbling block remains mortgage finance,” he said. He pointed out that less than 1 per cent of the housing stock changed hands last year. “I would have thought that stock turnover should have been between 3 and 4 per cent.”
Lowe said the register might make the market more realistic. “If the register had been in place during the boom, I think it might have controlled prices. People would have seen how much houses were selling for on a particular street and maybe held off on bidding wildly in excess of that amount for a similar property.”
It has been compiled by the Property Services Regulatory Authority (PSRA) using stamp duty figures from the Revenue Commissioners and while details are limited to price, address and date of sale, websites such as myhome.iehave been quick to crunch the numbers to help people look behind the spartan figures to make better comparisons with properties on the market today. Using geo-mapping software, myhome.ie's maps now carry symbols for houses currently for sale as well as symbols for houses sold and listed in the register.
The property portal’s managing director Angela Keegan said the ease with which people can now compare asking prices with actual selling prices “will make bidders question prices more. If someone sees a house with an asking price of €600,000 and can see that a house on the same street has just sold for €540,000 then it will make them really think about the prices they are willing to pay. Remember that no-one wants to sell at the bottom and no one wants to be the one on their street who paid the most for their house.”
Myhome.iesaw its busiest ever day on Monday with traffic increasing by more than 20 per cent on its previous record as people went online to see what the new information meant.
Keegan said the site will draw on the property register to show trends in the market. “One trend we have noticed in the past three months is that the actual transaction prices in Dublin, for example, are higher than the asking prices and you are seeing multiple bidders on many properties.
"There are a number of very important things about the register," said mortgage expert Karl Deeter from Irish Mortgage Brokers. "First, it gets rid of a lot of the spoofery that took place during the boom." He says the myhome.iesoftware changes things because "you can compare asking prices with selling prices and very quickly see where transactions are taking place. If there are a lot of red dots in an area then it shows a lot of interest and is a solid indication that that is where demand is."
Across the industry the register was welcomed, with everyone saying it was long overdue – almost 40 years too late by some reckonings.
Roland O’Connell of the Society of Chartered Surveyors in Ireland pointed out that the price information has been widely available in the UK and other European countries for years.
He hoped the price register would increase confidence in the market and would be useful for purchasers but echoed the concerns of others in highlighting the absence of mortgage finance as the biggest problem. “While having more information about property prices is crucial, being able to act on the information and source mortgage finance for those who are qualified buyers is the crucial next step,” he said.
While the transparency is there, it won’t stop the market overheating in the future. “Transparency is good but it won’t stop the boom and bust cycle,” warned Deeter. “There has been a register in the UK for many years and it has still gone through many such cycles over that time frame.
The chief executive of the PSRA Tom Lynch said the register came about after the then Irish Times property editor, Orna Mulcahy wrote to estate agents in 2008 expressing concern about exaggerated sales prices being submitted for publication. The problem was endemic, she wrote, with some prices reported to the newspaper over 20 per cent higher than the actual selling prices. “We will eliminate some uncertainty and that might restore some confidence into the market,” Lynch said. He promised that the authority would deliver monthly updates of the level and value of transactions so “people will be able to see how the market is behaving. And that is hugely important.”
Area decoded: Making sense of the numbers
There is a lot of data on the property price register but it can't paint a full picture about a property. Unless someone is intimately acquainted with an area, the information amounts to little more than numbers on a screen without details of the size or quality of any property.
Take the example of Vernon Avenue in Clontarf, Dublin 3, where 14 houses have sold since the beginning of 2010. The cheapest went for €158,333 and the most expensive fetched €1.25m. The average sale price over the three years since the records started, is €550,000. The first house that is listed as sold is number 140 which went for €570,000 in March 2010. The last is number 201 which went for €480,000 in August. That suggests that there has been a marked drop in prices on the road since 2010: there might have been but, then again, there might not. In October 2011 number 179 sold for €360,000; in December number 25 went for €770,000 and in July 2012 number 76 sold for €670,000.
The information becomes more useful when married to pre-existing information. That's what property websites have been trying to do since last Sunday. Now on myhome.ie people can see how much a house sold for and compare that with properties currently for sale on the same street. In the future it will be possible, on third-party websites, to pull up the full sales history – including house details, price changes and pictures – of a property on the price register.
Such tracking paints a grim picture of a bust. In April 2011, 42 Beechwood Ave in Ranelagh, Dublin 6, went on the market. The sellers wanted €880,000, which was about €200,000 less than they might have got at the height of the boom. By August 2011 the price had fallen to €740,000, but the house did not sell until March of this year. It made €605,000.
