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.
You meant "getting better" surely? :)
While falling property costs may still have a destabilizing effect given our insane state asset portfolio, ultimately lower property costs is better for everyone involved in doing any living of life in Ireland, or any business activity that requires premises and / or staff who can afford to live here.
Politicians used to campaign for affordable housing, not for something, *anything* to make it more expensive again. Thus we see the profound corrupting influence that the bubble has had on all thought in Ireland. Almost everyone is still incapable of seeing through the big lie.
Yes, I agree with the above comment.
Business correspondent on RTE in the last few days said "property prices look like they will keep falling I'm afraid". Why the negitive - I understand people in negative equity, but I and others I know didn't buy in the boom. People with open jaws said in bars "wow, you don't have a property - you should get your foot on the ladder" - well thank god i and others didn't - this is good for people who didn't buy and wish to buy and bad for people who did buy and banks, so RTE should take a more neutral approach.
The decrease in the property will affect the economy of the country. the Commercial estate agents Dublin will also face the problem of less profit. The time is good for home buyers and worse for sellers.
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