The new Residential Property Price Index, showing how prices have changed over the years, should serve as an antidote to the muddle of statements issued by banks, estate agents and others on our housing market

THE 19th century German philosopher, Arthur Schopenhauer once famously remarked that every truth passes through three stages. First it is ridiculed. Then it is opposed. Finally it is regarded as self-evident. We all knew that the property good times could not continue. It was obvious. Sadly only a tiny minority of economists, among them Professor Morgan Kelly at University College Dublin, economic commentator David McWilliams and Dr Alan Ahearne, recently returned from the Department of Finance to NUI Galway, read the tea leaves properly when it mattered.

At least the establishment this month of the official monthly index of prices of houses and apartments is a major step that deprives us of excuses for not knowing while indulging in expansive sophistry.

The Residential Property Price Index, covering houses and apartments, from the Central Statistics Office (CSO), finally gives an official measure of monthly changes in residential property prices since 2005. The index will likely become the recognised authority on residential property price trends and will make our figures comparable to those of other European Union countries.

The first index, published this month, covers the period to March. The second, which will cover April figures, will be released early next month. There will be a six-week lead-in period for preparation of the figures.

The index ushers in an era of stricter standards in price information on Irish property. This has been sorely lacking and has made its own contribution to the implosion of the market, which sent shock waves through the economy. The index should serve as an antidote to the sometimes confusing, not to say self-serving, statements and reports issued by various banks, estate agents and others on the housing market here.

For practitioners in the property industry, it is novel and refreshing to hear CSO statistician, Paul Crowley, state that it would not be producing average property prices in the index because “average house prices are relatively meaningless”. At last, somebody has said it. “We can produce them, but they don’t mean anything,” he said.

Giving such figures in an extremely heterogenous market made the data unstable. Or, to put it another way, what does the average person trying to sell or buy a house care about “average figures”?

The new monthly figures will be based on transactions in the housing market that are financed by mortgages. The figures are supplied by eight lenders. It is not perfect, but it is a significant improvement. They will enable meaningful comparisons to be made.

It is now official that “the index for residential properties in Dublin recorded its first downward movement in late 2006 while the index for residential property in the rest of Ireland recorded its first decline in June 2007”.

The index provides monthly price changes, rather than actual prices paid, which is the second-tier that the information-starved property market is waiting for. The long-overdue national property price register will be given priority by the Property Services Regulatory Authority when it is given the authority to do so.

As regards when that may happen, the Department of Justice refuses to say more than that “it is expected that the Select Committee, when established, will move quickly to deal with the Property Services (Regulation) Bill”. With membership of the Seanad now complete, surely the committee can be established and this logjam broken.

The new index has also meant the end for the old Permanent TSB House Price Index, which has been the most reliable, or the least unsatisfactory, index of house prices since 1996. It changed from giving monthly figures to quarterly figures because of the lack of data in the current market.

The CSO figures do not capture local price variations, but the first monthly instalment from the CSO does suggest overall that:

* The largest price decline between February 2007 and March 2011 was for Dublin apartments: prices fell by 52 per cent.

* During the same period, house prices across the country fell 38 per cent from the peak reached in 2007.

* Since reaching the highest level, Dublin had experienced the sharpest decline of 47 per cent; prices in the rest of the country fell by 35 per cent.

* Residential property prices in Dublin were a further 13 per cent lower last March than they were just a year ago.

Without accurate and reliable information, reports, rumours, hearsay and even panic can take centre stage. Uninformed fears and comment can cause more damage to confidence than even the worst reality. Sometimes bad news is better than no news.

The new monthly Residential Property Price Index will be posted on the CSO website. It can only help towards the recovery of the property market.

Pat Igoe is a solicitor in Blackrock, Co Dublin