How far overpriced is property when you comapre to other options?

[MortgageBroker]

Interesting report and its true that property is way overvalued at the moment.

Have to agree with Gecko about the borrowing factor. To compare property v deposits we should treat both alternatives similarly.

Also im not sure about the annual loss in one year simply being multiplied by 5 to get the total. Are we ignoring the time value of money here ?

Alternatively would a DCF approach be possible ?

time value of money: if you have to get the present value on something making a loss - and bearing in mind that a future value wouldn't necessarily be greater because time value of money hinges on inflation (apart from widespread deflation in general there is not a likelihood of rental price inflation in the near term) what way would you calculate that?

[Watcher1]

Thanks for the feedback! send it around to whoever you want to send it to, its there for public use.

on Point 2: Agree totally but 'agreed' prices are impossible to get in the irish market, the data protection commissioner gave direction to propertyweek (who were one of the few places that collated that info for the valuers that use the system) that they were to desist, maybe we could look for the general percentage difference in Q2 & 3 of 08' and apply that to 09'? Although perhaps in 08' there was still some seller denial versus actual settlement price which would skew 09' if that margin has dropped... it's hard to get right! lol.

But on point 4: if the cashflow is negative the PV would result in capital reduction wouldn't it? which is basically the end position (versus capital starting point) shown? on the asking price versus yield all I can do - and this is partly assumption i suppose - is to say that the likelihood of price drops versus asking prices is equally reflected in lease asking prices, many are settling at different levels than advertised and certainly in the 'already let' market most landlords are dropping prices which isn't reflected out because it never gets advertised.

Thanks a million for the pointers though! Will help to make this report better over time, we plan to do it once a quarter.

Isn't our data protection legislation mostly similar to the UK legislation? After all they are both drawn from an EU Directive. In the UK you can get actual selling prices apparently. So why cant we? Anyone know the difference our legilsation has to the UK legislation that precludes us from getting the Irish data as opposed to the UK legilsation that allows it?

[MortgageBroker]

Isn't our data protection legislation mostly similar to the UK legislation? After all they are both drawn from an EU Directive. In the UK you can get actual selling prices apparently. So why cant we? Anyone know the difference our legilsation has to the UK legislation that precludes us from getting the Irish data as opposed to the UK legilsation that allows it?

as far as i recall its due to 'private treaty' being our main way of selling property rather than auction or whatever other method they use in the UK, personally I think its ridiculous that somebody doesn't readily have such important figures to hand to help us interpret the market, it does nothing for transparency either.

[Watcher1]

as far as i recall its due to 'private treaty' being our main way of selling property rather than auction or whatever other method they use in the UK, personally I think its ridiculous that somebody doesn't readily have such important figures to hand to help us interpret the market, it does nothing for transparency either.

As far as I am aware, the UK property market has the same methods of sale as ourselves - private treaty, public auction, sale by owner, sealed bids (very small if not non existent for private properties in Ireland) etc. My own opinion is that tyhe Irish authorities are taking the lazy option. Even if the DP law is a hindrence, the figures could be compiled and released in an anonimised fashion.

[carlovian]

time value of money: if you have to get the present value on something making a loss - and bearing in mind that a future value wouldn't necessarily be greater because time value of money hinges on inflation (apart from widespread deflation in general there is not a likelihood of rental price inflation in the near term) what way would you calculate that?

Using a DCF approach.

Also Ive messaged you a few ideas re Time value of money