At long long last, Ireland has a property price register! The site went live hours before the revised deadline (end of Q3 2012), and there will hopefully be time in future to quibble about how it took so long for what seems to be no more than “export to .csv” – particularly given how much extra had been done by private citizens, by the time I went to bed less than 12 hours after its launch, from rival sites to apps.
Nonetheless, we should take the opportunity to bask in this wonderful new service available to individuals and households active in the property market. With all the excitement, I thought I might offer three tips for researchers, from someone who spends an unhealthy amount of time with property market data, as I see from thepropertypin and other places that plenty are starting to do their own number-crunching.
Individual analysis, not market analysis
The first tip would be to remind people that the primary contribution of the register is in relation to individual transactions, not market-level analysis. What I mean by this is that someone thinking of buying a property has an area, village or street in mind, and with this tool, they can go on and – using their knowledge of particular properties, including things like size, condition, aspect, etc. – see what prices are like nearby.
The volume of sales
Nonetheless, people will be determined to divine some signals about the market as a whole from the register as currently constituted. So, when it comes to market-level analysis, the only really cast-iron contribution of the register is sales volumes. The register tells you how many properties were sold by month for each county. It is clear that there will be variability in individual county-month pairings, so my own recommendation would be to focus on quarterly data at the provincial level (counting Dublin as its own province).
What about prices?
Ultimately, though, people want to talk about prices, which I get. If you must talk about prices, best to talk about median prices (=MEDIAN in Excel), or perhaps the other quartiles such as 25th and 75th percentiles (one quarter and three quarters the way through the price distribution).
What I am stressing, though, is to avoid talking about mean prices (=AVERAGE in Excel). Even with median prices, the data are going to get dragged this way and that by the mix of locations and types of properties sold in any given quarter, which is why even median prices have greater health warnings than – believe it or not – hedonic or mix-adjusted prices such as the CSO and daft.ie series.
Mean prices (what we think of when we typically think of averages) will be affected not only by that but also by extreme values and in particular errors in data entry by solicitors, which are not infrequent (having spent a lot of time yesterday wrestling with the data). For example, one property in Limerick sold for €127m [I’m guessing €127,000 is its true price] while others in “leafy” parts of Dublin sold for mere thousands [not hundreds of thousands].
So, use with caution as a market research tool. This is not a substitute for a rigorous index of house prices and, like it or lump it, indices such as the CSO and Daft.ie remain far better tools to analyse price trends in the market as a whole. But that should not take away from the main point, i.e. that this is an absolutely essential tool for those looking to buy and sell. Happy nosy-parkering!