Property Bulletin: Prices may be both rising and falling on the same street - cue confusion
Figures published by the Irish Independent today from the property price register show just how muddied the waters are becoming for those attempting to keep track of real property market price trends at the moment.
Just to confuse things even more, into the mix we can also throw the new Central Bank lending restrictions which have been blamed for successfully damping Dublin house prices.
The lending restrictions, which have most impacted on the ability of city buyers to buy mid-range homes, are likely to cause some sort of "logjam effect".
We know that 20 years ago a similar spanner was thrown into the works of the upper mid-city market by an increase in stamp duty.
The hike from 6pc to 9pc for these homes prevented many people from trading up.
Against a background of tight supply, prices increased and the stamp duty gap became too much for many to bridge. The resulting "log jam" meant people could not move up from starter homes. In turn, those seeking starter homes could not find enough property because those in starter homes could not sell to trade up.
The resulting famine in properties available for sale also saw decreasing transactions - a problem which was not remedied until a more evenly stepped stamp duty ladder was eventually introduced.
What also becomes apparent is that sometimes the State's own figures, as contained within the register, can actually add to the confusion rather than clarify the situation - as was intended when the register was first introduced.
According to the State provided register - the numbers of transactions have been falling in the second quarter and prices appear to be rising in most locations.
And transactions may indeed be falling thanks to the Central Bank's lending restrictions introduced at the beginning of the year.
The problem is that given the "lag" in the register, it's difficult to tell if the falling transactions shown in Q2 are related to this, or if they are occurring because many of the sales agreed in Q2 may not yet have been recorded in the register.
It takes between six and eight weeks on average to move a property deal from "sale agreed" - the point when the price is established - and "sold" - the point when the transaction is processed. In some cases this can take 10 weeks or more. Next, from the point of when a property is signed, it can take a week or two for it to appear on the price register. This would suggest that second quarter data from the register might better reflect prices agreed in quarter one.
Similarly, it's possible that quarter one stats are a closer reflection of prices agreed late last year.
Other data, such as that recently published by the Real Estate Alliance says Dublin prices for average family homes have fallen by around 5pc on average - but that prices are still rising for average homes in areas where they are cheapest.
So prices are both rising and falling in Dublin, possibly even on the same street. Cue even more confusion!
As we learned before, confusing data on the housing market can lead to big trouble.
The register is invaluable, but it can still be a muddy medium when it comes to data provision over recent periods. As we approach the Budget, it means that it has become much harder for Cabinet members and their advisors to contemplate realistically what is actually happening on the ground in the city markets.
But this is something they need to know order to form suitable policy.