26/4/2014: How real was the property markets recovery in 2013?

I am updating the annual series for Residential Property Prices in Ireland and here are some of the summary charts showing Q4 averages (end-of-year smoothed prices, that remove some of the volatility):

Key takeaways:

• Reports of major recovery in the property markets over 2013 are a bit overdone. Here are the reasons why.
• The recovery in Dublin in 2013 took the prices above the levels of 2011 and closer to 2010. Dublin all properties index finished 2013 at Q4 average of 68.1 which is well above 59.3 trough recorded in Q4 2012 and ahead of 62.0 recorded in Q4 2011. We are still less than 1/2 way to 2010, but overall jumping tow years back is a rather strong recovery.
• Dublin recovery was also broadly supported in both houses segment and apartments segment.
• However, outside Dublin - aka in the rest of the country - there is no recovery. National ex-Dublin all properties prices have fallen again in 2013 as they did in all other years starting with 2008 on. 
• As the result of the prices dynamics in the rest of the country, 2013 'recovery' nationwide was able to lift prices off their crisis period troughs, but not enough to reach above the 2011-2012 declines. Thus overall index of nationwide properties is at 69.7 in Q4 2013 against 70.1 in Q4 2011. 

Are prices rising? They seem to be. Are prices rising above inflation? Yes. And this is one sign of a robust recovery. But are prices rising to make meaningful recovery toward pre-crisis levels (something that is required in order to rebuild household finances)? No. See more on this here: http://trueeconomics.blogspot.ie/2014/04/2642014-its-long-long-long-road-to.html