In recent days two conflicting reports have emerged as to the health of the Irish residential property market.
According to the Irish Independent, one of the two Irish home-registration firms, Premier Guarantee, did not register a single house in January. Premier Guarantee’s larger rival, Homebond, only registered 149 houses in January, including just 24 in Dublin. At the peak of the property market in 2006, Homebond was registering 6,122 houses a month or about 72,000 in a full year. Premier, the smaller of the two registration services, was registering about 2,117 houses per month, or almost 25,000 per annum. Of the 149 houses registered with Homebond in January, 62 were in Cork, 16 in Kildare and 24 in Dublin. In most of the other counties there were less than three houses registered, with many counties only registering a single house. Premier Guarantee and Homebond provide structural defect cover for new homes in the first 10 years after construction. The number of new homes registered with these firms is regarded as a reliable indicator of Irish housing starts.
However, data emanating from Property website Myhome.ie identifies a threefold increase in the number of ‘sale agreed’ second-hand homes in January compared to the same time last year. According to Myhome.ie, 658 properties reaching sale agreed status in Dublin last month compared with just over 200 in January 2009. Similar trends were seen in Kildare, Wicklow and Meath.
These conflicting reports raise a number of questions about the underlying trends at play in the Irish residential property market. The Myhome.ie data may be capturing some pent-up demand among a cohort of buyers, who are eager to snap up what they perceive as bargains in the Greater Dublin Area. If so, is it only a matter of time before this pent-up demand is expended? In that case, is the Myhome.ie data indicative of a dreaded “dead cat bounce”, prior to a prolonged property market slump? Even if Myhome.ie has uncovered positive property trends in Dublin, Kildare, Wicklow and Meath, the residential property market outside of Leinster may be in a far worse condition than the Myhome.ie figures suggest.
One may be tempted to withhold judgement until a detailed property price index is released. This may take longer than expected: the Permanent TSB / ESRI House Price Index will now be issued on a quarterly basis rather than the current monthly format. The reason cited for this? low sample size.