This is exactly the exercise I performed.
Let's take a look at the CSO RPPI (an index) and Daft.ie (prices):
So a strong relation in terms of asking prices and RPPI - some 97% of variation explained.Similarly, a very strong relationship between RPPI and Daft.ie reported asking rents:
Note that there are serious lags in the asking prices and rents relative to what RPPI is measuring, but overall, Daft.ie seems to be doing as good of a job of capturing prices over the long term as CSO data.It is worth noting that when I converted Daft.ie prices to an index comparable directly to CSO RPPI, the results remained the same. So well done to Daft.ie gang - they really managed to run (and continue running) a superb database.
Another interesting issue is the relationship between property prices and rents:
Really, self-explanatory.
2 comments:
I don't understand the massive leap in rent from Dec 07 and Jan08. In a single month it jumps by almost €100.00. It looks strange.
Nice graph though.
I have always made it clear that inflationary policies were the intent of successive governments and that is easily seen by the support for banks to lend through regulatory exhortation, the SSIA scheme and the encouragement of tax evasion involving DIRT.
They do not wish to understand value: prices are what matter to them and they are still thinking that way!
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