A MEASURE of the depressed state of the housing market is the decision to cancel the monthly ESRI/Permanent TSB house price index and to replace it with a quarterly survey. The change was made because too few mortgages have been issued to homebuyers to provide accurate monthly price data. At least in the short term, this means that policy makers, house buyers and sellers, and the construction industry will remain poorly informed about housing market conditions at a time of great economic uncertainty.
Policy makers, who have to rely on out-of-date data, will find it harder to track price movements in an increasingly opaque housing market. House buyers who must operate in a market that lacks price transparency – given the effective ban on the publication of house sale prices – will face even greater uncertainty. A quarterly survey of house prices will make property valuation more difficult for buyers.
Director general of the Construction Industry Federation Tom Parlon has called for a national register of house prices and said rightly: “Given the centrality of the housing market in any domestic economy, a guide to house price movements as they happen, is an absolute requirement”. Such data is available in Northern Ireland, Britain and in most developed economies.
In the revised programme for government last October, the coalition parties agreed to establish a house price database to record details of residential and commercial property sales. They also promised to amend the Data Protection Act to allow publication of the sale price of houses. In order to make informed investment decisions, buyers and sellers must have access to accurate current information on house prices. Since October, however, little has changed.
The ESRI estimates that house prices may fall 50 per cent from their peak. Many prospective home-buyers will hope to purchase at close to the bottom of the housing market. But in doing so they will find themselves doubly handicapped in making their decision to purchase. Henceforth general house price data will be three months out of date when it is published while the ban on publishing the sale price of houses has resulted in a non-transparent property market which leaves buyers at a serious disadvantage.
The housing market urgently needs clarity and certainty about the Government’s intentions: about when the law will be amended and how the property register will operate.