Lies, damned lies, and Q1 property statistics

It’s been quite the week for property market stats, and while there’s clear consensus that prices are on the up, the discrepancies between the property portal figures (ie MyHome and Daft) and those of the two leading estate agencies (ie Sherry Fitz and DNG) are quite stark.

The two agents reported a relatively modest increase in Dublin house price rises in the first quarter, with DNG reporting a 3.3 per cent increase, and Sherry Fitz reporting 1.8 per cent. Meanwhile the property portals, MyHome and Daft, reported far greater increases of 6 per cent and 5.4 per cent respectively for the same quarter.

So why is this happening? The estate agent figures work in a similar way to the consumer price index (CPI) where they take the same basket of properties and revalue them at intervals based on factors like sale prices achieved and asking prices for comparable properties in the same area. So a standard international repeat valuation method is applied to the basket each time. It’s slightly scientific.

The property portals on the other hand base their figures solely on average asking prices for properties listed on their sites. What’s key here is that these figures don’t reflect prices achieved, but solely vendor (and their agent’s) expectations for a price not yet realised. So the far higher portal figure is explained by the triumph of vendor hope over experience - as the property is still only for sale.

First quarter figures

According to

Marian Finnegan

, chief economist with Sherry Fitz, the first quarter figures need to be taken with a large pinch of salt. “When the market tightens in the first quarter, with less stock available, vendor expectations are pushed higher and they become more aggressive with their pricing. Usually as more stock comes on stream over the year, this will relax.

“I would anticipate around 10 per cent growth this year and that figure won’t end up much different for the portals, it is inadvisable to compare them month by month, particularly at the start of the year. The impact of the new Help to Buy scheme and other macroprudential measures should not be judged solely on the first quarter, it’s too early.”

Keith Lowe of DNG agrees: “The portals annual figures are going to go into orbit if this keeps up but this might be more to do with how vendors/agents are setting their quoting prices than actual values.”

Since the Central Statistics Office (CSO) now includes realised sale prices from the residential property price register along with mortgages drawn down this is probably the most accurate barometer of property prices. We await their quarterly figures with interest.