House price index
Falls in house prices vary considerably from the national average, of about 40pc, when looked at not alone by location but also by type and sector. On a national basis, for instance, apartment prices have fallen by between 41pc for second-hand one-bedroom units to as much as 45pc for new two-bedroom units. Prices for houses are down between 33pc and 37pc. The more pronounced decline in apartment prices can be attributed to a much greater level of oversupply in the market, and the collapse in demand from investors, who accounted for a significant share of the apartment demand during the boom.
Critically, however, the data suggests that average national prices have further to fall if we are to see the 50pc peak to trough decline which has been predicted by some economists. Of course, not all locations will necessarily experience price declines of this magnitude, although the converse is true in that there will be locations where price declines will be well in excess of this. Equally, there are likely to be areas of the market where prices have already reached a floor.
Regarding the amount of housing available, estate agents were asked if the number of properties for sale in their area had risen, fallen or remained unchanged since the beginning of the year. At a national level, 39pc of agents suggested there was no change in stock levels since the beginning of the year, 35pc suggested stock levels had increased and 27pc suggested stock levels had decreased. Opinion varies on this depending on location and this becomes a little clearer when you look at the regional breakdown.
The survey suggests stock levels are falling in Dublin and the Midlands regions and are increasing in the Mid-East, Mid-West and South-East regions. Where stock levels fall, this suggests that sales activity is starting to clear some of the overhang of stock in the market.
Agents were asked if activity levels in the first four months of this year had increased/decreased/remained unchanged -- when compared to the final four months of 2009. An overwhelming majority, 71pc, reported an increase in sales activity in the first four months of this year, with the increase particularly evident in Dublin where 83pc reported an increase, the Midlands 75pc, Mid-West 81pc, South-West 75pc and the West 80pc. The only exception is the South-East, where 42pc of agents reported no change in sales activity, 33pc reported an increase and 25pc reported a decrease.
The survey indicates that people are starting to buy again. But before we get carried away, this needs to be put into context. Sales were non-existent for most of 2009, although the Dublin market had started to improve towards the end of the year. This increase in activity is only the start of what is likely to be a gradual and protracted recovery in the property market -- there is a long way to go. Respondents were asked how long it typically takes to get a property sale agreed from the time it first appears on the market. The results suggest that it takes 23 weeks, just shy of six months, nationally to get a property sale agreed. The regional results also present a very revealing picture -- in Dublin the time-to-sell was 12 weeks, 16 weeks in the Mid-East, 22 weeks in the Midlands, 23 weeks in the Mid-West, 26 weeks in the South-East and South-West, 28 weeks in the West and 30 weeks in the Border region. Clearly properties are moving much faster in the Dublin and Mid-East markets than in other parts of the country.
Finally, the estate agents were asked about their expectations regarding the future for the market and whether or not sales activity will be higher, lower or unchanged in 12 months time. A clear majority of 76pc stated they expect sales activity to increase in 12 months time, albeit striking a note of cautious optimism, with 62pc expecting a moderate increase.
Agents are particularly hopeful about an increase in sales activity in the Mid West region where 94pc expect an increase and 81pc expecting a moderate increase. In the South East, 92pc expect an increase with 75pc expecting a moderate increase. In Dublin, 71pc of agents expect an increase in sales activity in 12 months time, with 54pc expecting a moderate increase.
So there is cause for hope that sales activity has increased during the first four months of this year and estate agents expect even more transactions in twelve months time. That said, some estate agents are probably thinking that things can't get any worse.
Overall, the results from the survey are relatively positive and suggest that a recovery is starting. Many agents report that prospective buyers now believe that current prices represent "good value" although they probably mean better value relative to the peak of the market.
Agents also believe the market is close to bottoming out. While this may be the case in some locations, we are likely to see some market indices recording price declines during the rest of this year and into 2011 before eventually levelling out.
Vendors are begining to realise where the market is at and are starting to price properties at levels acceptable to buyers.
As many as 105 agents responded to the survey between 28 April and 5 May.