Sir, – Recent CSO figures show that house prices in Dublin have increased by 12 per cent in the past year and questions have been raised as to whether this is the start of another property boom. House prices had decreased by some 51 per cent since the peak in 2007. There is danger that we will compare the 12 per cent with the 51 per cent, but these percentages relate to different bases.
For example, a €400,000 house in 2007 has reduced in value to say €195,000, from peak to trough, a reduction of €205,000 or 51 per cent on the €400,000. The house is now worth say €218,400, an increase of 12 per cent on the €195,000. However, this increase in value of €23,400 represents only 6 per cent of the peak value of €400,000.
In fact, house values will have to increase by some 105 per cent in value from the trough values, to reach the previous peak values! So beware the percentages. – Yours, etc,
HENRY MURDOCH,
Haddington Lawn,
Glenageary,
Co Dublin.