Houses in Dublin are desirable and yet nobody seems able to buy them
Published 31/03/2016 | 02:30
You have to feel sorry for the very capable and efficient statisticians at the CSO - who for years have been forced produce a flawed monthly Property Price Index.
We only get half the picture - because the CSO deals only with data from mortgaged purchases and cash sales.
But cash sales currently account for 40pc of transactions nationally, rising to 48pc when Dublin is excluded.
And the statistics are recorded at the point at which the mortgage is drawn down. A recent survey of IPAV showed that this average period has now stretched out to 20 weeks - or five months.
This means the February figures from the CSO in reality are more likely to reflect what was happening last August or September.
However, by its inclusion of mortgaged buyers only, the index is at least useful on one front - to reflect the effects of the Central Bank's lending restriction.
This time it clearly shows that values for houses are falling in Dublin, and were still rising outside of the capital where prices are much cheaper.
We know that houses in Dublin are no less desirable than those outside it, so we can only assume that the value slippages reflect reduced buyer numbers caused by an inability to get a mortgage.
At the current 3.5 times salary requirement for a loan, it is impossible to see how an average Dubliner (earning €40,000 qualifies for €140,000) could hope to obtain a loan for a three-bedroom semi in a city where average prices for those types stand at €350,000 and over.
Another report this month showed that the average deposit for a property in Dublin is now €50,000, slightly less than the price of a brand new Mercedes E class saloon.
The CSO does include a footnote in its current bulletin to say it is looking at the use of stamp duty data to include cash buyers at some point in the future.
It's my guess that if we had that data today, it would be showing an increase in house purchases in Dublin by the cash kings - investors who are seeking to make a killing on the increased numbers of city families now being forced into rental - whether they can afford to repay a mortgage or not.