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Mr John a moran , secretary general, department of Finance ‘supporting a sustainable property market,’ PII June 28, 2012. Where we were. SHARP CHANGES IN UNEMPLOYMENT NUMBERS. Economy too dependent on house building…. Sources – CSO and DoF. Anecdotal evidence that we’ve reached the bottom?.

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Where we were

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Where we were

Mr John a moran, secretary general, department of Finance‘supporting a sustainable property market,’ PII June 28, 2012

Strictly private and confidential


Where we were

Where we were

SHARP CHANGES IN UNEMPLOYMENT NUMBERS

Economy too dependent on house building…

Sources – CSO and DoF


Where we were

Anecdotal evidence that we’ve reached the bottom?

‘Allsops Auction’

Strong demand with one consumer purchasing three unfinished houses and a four acre plot in Cavan for €122,500

Sherry Fitzgerald

Now have an additional 4,000+ registered buyers compared to previous year


Where we were

Property prices – Are they further proof of stabilisation?

Residential Property Prices fell by

15.3% in the year to May 2012

Residential property prices fell by 1.1% in April and grew by 0.2% in May, following March 2012 when there was no change in residential property prices

In Dublin, residential property prices

rose by 0.2% in May, following a rise of 0.5% in April; the rest of Ireland fell by 2% in April.

Overall Decline

National index is 50% lower than its

highest level in early 2007.

In Dublin – house prices are 55% lower

than at their highest level in early 2007.

Rest of Ireland – residential properties are lower

at 47%

(Source - Central Statistics Office)


Where we were

IBF Mortgage Lending 2005 - 2008


Where we were

New Lending down in Q1 2012 after signs of improvement in

previous Quarters

New Lending

- 31.4%

Q1 2012 – decrease in loans issued compared to Q1 2011 down 19.3%

IBF/PwC Mortgage Market Profile


Where we were

IBF / PwC Mortgage Market Profile

Quarterly Report – New Lending

  • Loan Values

  • Q1 2012, a total of €450 million (2,630) in mortgages was drawn down, compared to €639 million (3,856) in Q4 2011.

  • Total value of mortgages drawn down in 2011 was €2,463m (14,273).

  • The FTB and re-mortgage segments lost market share, while mover-purchaser, Residential Investment Letting (RIL) and top-up segments each increased their market share.

  • FTBs and mover-purchasers together made up more than 84% of the market in value terms.


Where we were

Some Existing Initiatives to lift Property Market

Budget 2012

Priority Areas of Focus

NAMA 80:20 Deferred Payment Initiative

  • Initiative launched in May 2012. In combination with Budget measures, NAMA believe initiative can increase activity in the market.

  • Aim is to protect homebuyers from potential future falls in property prices

  • Limited to 750 houses in total.

  • Pilot phase of 115 properties located in residential developments in Dublin, Meath and Cork.

  • Pilot scheme will be subject to an evaluation as to its outcome and NAMA may in future extend the Initiative to additional residential units..

  • Stamp duty arrangements for residential property continue to apply with 1% on transactions up to and including €1 million, and 2% thereafter.

  • For those who wish to purchase a home:

    • FTBs will get mortgage interest relief at a rate of 25%

    • Non-FTBs will benefit from relief at 15%


Where we were

Influencing factors

  • Interest rates amongst lowest in Europe

  • Strong favourable demographics

  • Unemployment still high

  • Mortgage approvals given but not all translating to transactions

  • Risk – consumer wary of further fall in house prices

Strictly private and confidential


Where we were

The Irish Housing Market – David Duffy and John Fitzgerald

Demographic Drivers of the Demand for Dwellings, Thousand per Year

Number Renting by Age Cohort

Ratio of the User Cost of Housing Relative to Renting

Population by Year of Age

Strictly private and confidential


Where we were

The over-supply picture……or is it?


Where we were

The Irish Housing Market – David Duffy and John Fitzgerald

Strictly private and confidential


Where we were

Some Further Initiatives Suggested……

New Bank products,

e.g, emigrant purchase loans

Extend Mortgage

Approvals to 6 months

Tax Incentives

National Property Forum

Clearer

Communications on

Market Conditions

National House

Price Register

Negative Equity

Mortgages

What else?


Where we were

Next Steps

Strictly private and confidential


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