The front page of today’s Irish Times has a very well-written article about house prices in Ireland and Dublin. But one thing has always annoyed me and this article reminded me about it. It is that estate agents always quote the “annual year-over-year price increase”. They’ll say, “prices rose 5.5% from January 2006 to January 2007”, or whatever. It looks good – certainly, at first blush, you’d be thinking, oh gosh, prices are up 5.5% and I better jump on that bandwagon before it leaves town. I’ll have to sell that granny of mine, might get a few bob for her, although the prices for grannies has been going down recently. And that guitar in the attic will have to be dusted down and used on Grafton St. If all else fails, I have my Brian Kennedy cds to sell….
But the point is, this is all a con. To illustrate my point, let’s look at a (fake) graph I’ve made up to show my point below. Imagine that prices rise inexorably from January 2006 to August 2006 (which they pretty much did in Ireland!). Imagine also that they then took a decided downturn around October, which continued until January 2007. In fact, let’s say that prices dropped 4% from August ’06 to January ’07. But, out pounce the estate agents! The January ’07 prices are 3% higher year-on-year. Hmmmm…curious how the price drop over a 6 month period has magically disappeared. No….not magic, just estate-agent-speak.
So, next time you read that headline and see the words “year-on-year”, stop and consider. Oh, and next time prices stop dropping and start rising, the agents will magically start talking about “the rise over the past month has been of 4%” blah blah. Oh dear.
On a more serious note: prices are dropping in Ireland, although not, apparently, in Dublin. Every little doggie on the street knew that for the last 6 months. But you’d have waited in vain for an official publication like the Irish Times to actually say so, enthralled as they are to the “property experts” out there. That’s another bug-bear of mine…another posting perhaps.