Monday, March 26, 2012

26/3/2012: Residential Property in Ireland - things are still getting worse, faster

Residential Property Price Index for February is out today and, surprise, the property price deflation is accelerating.


  • All properties headline index now stands at 66.1 down from 67.6 in January 2012 and 80.4 in February 2011. So mom contraction of 2.22% in February 2012 makes this the fastest rate of monthly decline since March 2009 and the third fastest rate of monthly decline in history. Relative to peak, residential property price index is now down 49.35%. 12mo MA of monthly declines is at 1.62% and January-February average is at 2.05%. Year on year index is down 17.79%. Which is what it says on the tin - third month of accelerating declines in prices in a row.
  • House prices sub-index is now at 69.0 against January 2012 reading of 70.4 and February 2011 reading of 83.5. Monthly rate of decline in February was 1.99% - steeper than anything recorded since October 2011, marking third consecutive month of accelerating monthly drops. Year on year, the index is down 17.37%. Compared to peak valuations, house prices index is now 47.73% down. Year-to-date average monthly drop is 1.90% against 12 mo MA decline of 1.58%. Again, house prices are dropping at an accelerated rate now as well.
  • Apartments sub-index has reversed two months of consecutive shallow gains in November -December 2011 and run a 4.30% contraction inJanuary 2012. February 2012 monthly drop was even larger at 5.47%. The sub-index now reads 48.4 against February 2011 reading of 63.5. Year on year February apartments prices index stood at -23.78%. 12mo MA decline is 2.06% and this has dramatically accelerated to January-February average of 4.88% monthly rate of price declines.
  • Dublin properties prices sub-index was at 57.6 in February 2012, down 1.2% on January 2012 and down 20.33% on February 2011. This is the only major sub-index that posted de-acceleration in monthly contraction rates. 12mo MA contraction rate is 1.87% and January-February average is 2.58%, but January mom decline was 3.95% against 1.20% drop in February.
Charts to illustrate:

Note: no update to my forecasts.

Nama valuations:

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