Don’t be fooled by cash buyers and supply restrictions affecting property market

New data from the "have we learnt nothing" school of indicators emerged this week, with semi-positive pronouncements on the housing market from our old pal Moody's leading the charge. Accompanying the agency's talk of the bottom having been reached, we had news from AIB on Thursday that the pace at which good loans turn bad slowed significantly as the end of September approached.

Later that day, official figures from the Department of Finance signalled a similar but more nuanced picture: the number of home loans in arrears was slightly lower in September than it was in August, while the number of loans treated with temporary solutions was declining in favour of an increase just shy of 4 per cent in permanent medicine such as split mortgages or term extensions.

Still though, the holders of more than 80,000 mortgages remain well behind on their loan repayments, presumably fearful of every letter that falls through the letterbox. There was also talk of higher impairments from KBC Ireland, another big mortgage player.

Back on the other, considerably merrier, side of the picture, the Moody’s data was underlined by the latest information from property site Myhome.ie, which found that both the number and value of home sales in Dublin (things are different elsewhere) is at a three-year high.

The total value of transactions in the first nine months was up almost a third on last year.

So what can we take from all of this, apart from confirmation that property and its ownership continues to weigh on the nation in the way only a true love can?

Not much, is probably the best answer, at least until lenders begin to truly ramp up the repossessions and debt restructurings that lie in the future of so many homeowners.

The other thing that needs to wash out of the system is the mythical cash buyer, who is generally accepted as accounting for close to half of transactions at the moment.

On top of this, last week’s rate cut from the European Central Bank will do its bit to skew the natural course of affairs by making it even less attractive than previously to sell up and allow for market movement.

Perhaps the most sensible take came from the Moody’s analysis, which found the market had been temporarily boosted by cash buyers and supply restrictions, but emphasised that this would be “insufficient to facilitate a significant recovery in prices”. In other words, it’s not quite time yet for us all to party.