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CSO figures show average cost of new home in capital has risen 60% since 2010

Tue, Oct 31, 2017, 19:26

Eoin Burke-Kennedy

CSO figures show that, between 2010 and 2016, the average cost of a new home in Dublin increased from €282,289 to €450,274. Photograph: Frank Miller




The average price of a new home in Dublin has risen by nearly 60 per cent in the last six years, while the cost of an existing or second-hand home has increased by just 11 per cent.

The disparity, revealed in figures from the Central Statistics Office (CSO), suggests the current high rate of property price inflation – now running at close to 12 per cent in Dublin – is being fuelled, in part, by the new-home sector, which accounts for about 15 per cent of transactions.

The CSO figures show that, between 2010 and 2016, the average cost of a new home in Dublin increased from €282,289 to €450,274.

Of the four city authorities, Dún Laoghaire-Rathdown recorded the sharpest rate of increase with average prices more than doubling from €301,186 to €618,026.

In Dublin city, average prices jumped 70 per cent from €246,572 to €419,472 during the six-year period while in the other two local authorities, South Dublin and Fingal, the average cost of new home rose by 41 per cent and 34 per cent respectively.

During the same period, the average price of an existing home in Dublin rose by 11 per cent from €351,612 to €389,879 .

While Dublin City recorded the biggest jump of nearly 15 per cent, average prices in Fingal actually fell by 1 per cent during the period.

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The figures reveal that in 2010 the average price of a new home was 25 per cent cheaper than an existing house but by 2016 the average cost of a new home was 15 per cent more expensive.

Experts linked the sharp turnaround in the price of new homes since 2010 to the fact that most units coming on stream are bigger; built to higher specifications; located in more established areas; and aimed at groups with higher incomes.

“The CSO figures illustrate the hill that prospective new-home purchasers are faced with in Dublin,” architect and property expert Mel Reynolds said.

“New homes became unaffordable in Dublin in 2012, and the situation has since deteriorated further,” he said.

Currently only the top 20 per cent of earners can afford to purchase even the cheapest second-hand home in Dublin even with a 10 per cent deposit saved, Mr Reynolds said.

“The CSO data highlight the policy blind spot of having no affordable housing scheme in Dublin, a big disappointment in the recent budget,” he added.

Help-to-buy scheme

Mr Reynolds said it was difficult to pinpoint what effect of Government initiatives such as reduced apartment standards or the help-to-buy scheme for first-time buyers have had on the upward trajectory of new home prices since 2012.

“A ‘flattening out’ of new-home prices since 2015 could be attributed to the Central Bank’s macroprudential rules introduced in February 2015.

“However, given that the majority of new builds are not aimed at first-time buyers and the prominence of cash purchasers, the effectiveness of this measure in mitigating price rises may be reducing,” he added.

The latest figures from the CSO show that residential property prices at a national level increased by 12.2 per cent in the year to August and by 11.9 per cent in Dublin.

The CSO figures revealed that the highest house-price growth was in Dublin City, at 13.4 per cent, while the lowest growth was in Fingal, with house prices there rising by 9 per cent.

Residential property prices outside of Dublin were 12.6 per cent higher in the year to August.

David Davis tells cabinet of ‘significant acceleration’ to get UK ready

Tue, Oct 31, 2017, 17:10

Brexit secretary David Davis told the cabinet there had been a “significant acceleration” in work to get Britain ready for its EU departure.




Preparations to leave the EU have already cost the government half a billion pounds and will lead the headcount in the British civil service to balloon by at least 8,000 workers by the end of next year, the UK government has admitted.

The Brexit secretary, David Davis, told the cabinet there had been a “significant acceleration” in work to get Britain ready for its EU departure, with 300 programmes under way across the government.

All efforts involve the government preparing for a “range of negotiated outcomes and a ‘no deal’ scenario for a policy area affected by the UK leaving the EU”, the prime minister’s spokesman said.

“The plans set out detailed delivery timelines including, for example, to recruit and train new staff, to design and procure IT systems and to deliver the necessary legislative and regulatory changes.”

He admitted that 3,000 new posts had already been created, including 300 additional lawyers, with HM Revenue and Customs confirming an additional 3,000-5,000 new workers by the end of next year.

“The chancellor and chief secretary to the Treasury then provided an update on the more than half a billion pounds that HMT has already committed for Brexit preparations, with over £250m additional funding in 2017/18,” the spokesman added.

There will also be new sub-committees within cabinet to prepare for strategic questions relating to the UK’s future relationship with the EU and to focus on domestic preparations.

– Guardian News and Media

Central Bank figures show cautious Irish consumers continue to save at record levels

Tue, Oct 31, 2017, 13:53

Eoin Burke-Kennedy

Photograph: Alan Betson




Risk-averse Irish consumers are continuing to keep their money on deposit despite the near zero rate of return.

The Central Bank’s latest monthly banking statistics show household deposits hit a record €100.6 billion in September, up €3.6 billion on an annual basis.

Merrion economist Alan McQuaid said the high level of saving reflects the ongoing caution of consumers.

“It makes you wonder what sort of deposits we would see if interest rates started to rise,” he said.

The figures also showed that loans to Irish households rose at a rate of 0.5 per cent year-on-year in September compared with annual increases of 0.2 per cent in August and 0.1 per cent in July, reflecting the gradual, albeit modest, recovery in lending since the financial crisis.

When adjusted for loan sales and securitisations, there was an annual fall of 1.5 per cent in lending, the lowest year-on-year drop since November 2009.

Lending for house purchase, which accounted for 83 per cent of total household loans, increased in net terms by €301 million in September.

Non-housing loans increased by 3.3 per cent in annual terms in September, marking 11 consecutive months of annual growth, while drawdowns on loans for consumption exceeded repayments by €710 million in the year to the end of September. The figures show net lending to non-financial corporations declined by €892 million, or 2.1 per cent in annual terms, in September.

The figures mean that Irish households continue to be net funders of the Irish banking system with banks holding €8.2 billion more household deposits than loans in September.

In contrast, household loans exceeded deposits by €72.6 billion in May 2008, just before the economy and the banking system crashed.

“The latest set of credit figures are again a mixed bag, with some good and bad features,” Mr McQuaid said. “But notwithstanding the caveats relating to the credit gap indicators at this time, they are still suggestive of a weak overall credit environment in Ireland. The bottom line is that credit will need to flow at a much stronger level than currently if the economy is to grow to its full potential over the long run.”

US president to break with long-standing precedent by overlooking incumbent Yellen

Tue, Oct 31, 2017, 11:28
Updated: Tue, Oct 31, 2017, 11:29

President Donald Trump is expected to nominate Jerome H. Powell as the next chairman of the Federal Reserve, replacing Janet L. Yellen, whose term expires early next year




President Donald Trump is expected to nominate Jerome H. Powell as the next chairman of the Federal Reserve, replacing Janet L. Yellen, whose term expires early next year, according to two people familiar with the plans.

Powell, a Fed governor since 2012, is a Republican with deep roots in the party’s establishment and in the financial industry.

He has steadily supported Yellen’s approach to monetary policy and financial regulation, creating an expectation that he would be unlikely to attempt large or sharp changes in the Fed’s course.

One White House official described Powell as a “safe” choice as well as the candidate who most closely fit Trump’s penchant for filling top jobs with characters from “central casting,” as he has often put it.

Both people familiar with the president’s thinking, who spoke on the condition of anonymity, cautioned that Trump was notoriously mercurial and liked creating drama around important personnel decisions.

However, both said the president appeared set on Powell. An announcement could come as soon as Thursday, after the Fed wraps up a two-day policy meeting on Wednesday and before Trump leaves Friday for a 12-day Asia trip.

The choice would cap an unusually public selection process, during which the president has openly discussed his views of various candidates, asked Republican senators to vote by raising their hands for those under consideration and sought the opinion of a television host.

Trump also posted a video on Instagram promising “everybody will be very impressed” with his selection.

In looking past Yellen, Trump would be breaking with long-standing precedent. Every Fed chairman in modern history who completed a first four-year term was nominated for a second.

The last three Fed chairmen were nominated for new terms by a president of the opposite party. And Trump has praised Yellen’s performance: During her four years, unemployment has fallen sharply, inflation has remained low and the economy is growing.

“You like to make your own mark,” Trump said last week, by way of explanation. In choosing Powell, however, Trump would be resisting pressure by conservatives to make a larger mark on the Fed’s management of the economy.

Many conservatives, including Vice President Mike Pence, favoured the selection of John B. Taylor, a Stanford economist who has been an outspoken critic of the Fed’s monetary policy.

Powell, by contrast, has voted for every Fed policy decision since 2012, although he expressed some reservations in internal debates about the extent of those efforts.

In recent years, he has backed the methodical unwinding of the Fed’s stimulus campaign, which involved purchasing $4 trillion worth of Treasuries and mortgage-backed securities to help the economy recover from the 2008 financial crisis.

A survey of 144 investors conducted by Evercore ISI found that they expected Powell would push rates modestly higher than Yellen over time. Powell also has sought a middle ground on the contentious debate over financial regulation.

Trump and congressional Republicans argue that excessive regulation is restraining economic growth. At a Senate hearing in June, Powell agreed that there was room to improve regulation, but he described the Trump administration’s proposals as a “mixed bag,” adding that he opposed some of the specific proposals.

Describing an effort already underway at the Fed, he said: “The whole idea is to preserve the significant core reforms that were made but to go back and clean up our work.”

Powell would require Senate confirmation, and his views, particularly on regulation, could draw opposition from some conservatives in the Senate, 21 of whom voted against his confirmation as a Fed governor in 2014.

Two Republicans on the Senate banking committee, which will consider the nomination, had previously raised concerns about Powell: Senator Tim Scott of South Carolina and Senator Pat Toomey of Pennsylvania.

If nominated and confirmed, Powell would be the first Fed chair in four decades without an economics degree. He brings a background in financial markets, a contrast with Yellen and her predecessor, Ben S. Bernanke.

People who have worked with Powell say he studied economics assiduously after joining the Fed, gathering stacks of papers on the questions of the day, then reading and discussing the findings with colleagues.

Jon Faust, a professor of economics at Johns Hopkins University who worked with Powell at the Fed, said Powell had endeavoured to understand monetary policy and had demonstrated a strong grasp of the subject.

But Faust said it might be particularly important to have a trained economist as chairman if there was another recession.

“If the economy broadly behaves, I don’t think it’ll be of great consequence,” Faust said. “If we were to face another period where you need innovative and creative leadership, Jay has a lot of skills, and it could still go OK, but you’d like to add to those skills a lifetime of studying monetary policy.”

Powell (64) is a Washington native who has spent most of his life here in a mix of public and private roles. He studied politics at Princeton University, then earned a law degree from Georgetown University before embarking on a career in investment banking in New York.

-New York Times

Former British PM queries why UK didn’t do as Ireland did and prosecute rogue bankers

Tue, Oct 31, 2017, 10:18

Fiona Reddan

Gordon Brown: “Little has changed since the promise in 2009 that we bring finance to heel. The banks that were deemed ‘too big to fail’ are now even bigger than they were,” he writes. Photograph: Jonathan Brady/PA Wire




The UK should have followed the lead of Ireland, Iceland, Spain and Portugal in prosecuting rogue bankers the former British prime minister Gordon Brown has said, as he argues that “scores” of cheating British bankers, including directors of Northern Rock, should be put in prison.

In his new book, My Life, Our Times: the Memoirs of Gordon Brown, published on Tuesday, Mr Brown delivers a scathing attack on the bankers who precipitated the 2008 financial crisis, arguing that the sector has failed to learn many of the lessons from this time. And he queries why bankers were not prosecuted in the UK – as they were in other countries such as Ireland.

“If bankers’ conduct was dishonest by the ordinary standards of what is reasonable and honest, should there not have been prosecutions in the UK as we have seen in Ireland, Iceland, Spain and Portugal?”

Writing in the book, Mr Brown, who was prime minister from 2007 to 2010, says: “If bankers who act fraudulently are not put in jail with their bonuses returned, assets confiscated and banned from future practice, we will only give a green light to similar risk-laden behaviour in new forms.”

Indeed Mr Brown is of the view that the prospect of rogue bankers gambling once again with public money is now “inevitable”.

“Little has changed since the promise in 2009 that we bring finance to heel. The banks that were deemed ‘too big to fail’ are now even bigger than they were,” he writes.

Financial crisis

Recalling the events of the financial crisis, which culminated in the then Labour government delivering a record bailout of the system, Mr Brown writes that Royal Bank of Scotland boss Fred Goodwin should have been stripped “not just of his knighthood but of his bonuses and the right to be a company director”, while Northern Rock directors should have gone to prison for fraudulent claims about the state of their loan book.

Mr Brown also argues that problems at HBOS, which shut the doors on its Irish operation, Bank of Scotland (Ireland) in 2010 due to careless lending, were compounded when the bank continued to ramp up its dubious loss-making property purchases even as the crisis worsened.

The former chancellor of the exchequer also has stern words for Barclays Bank, recalling how it tried to buy Royal Bank of Scotland, as well as Lehman Brothers, “misled the UK authorities and – while taking public money from Qatar and UAE authorities – tried to claim they needed no state support”.

Business Today: The best news, analysis and comment from ‘The Irish Times’ business desk

Tue, Oct 31, 2017, 07:19

Michael McAleer

Ryanair is still flying high, despite some recent turbulence, with its first half profits advancing by 11 per cent to €1.3 billion. Photograph: Paul Faith/AFP/Getty Images




Ryanair is still flying high, despite some recent turbulence, with its first half profits advancing by 11 per cent to €1.3 billion. Barry O’Halloran has the details.

Meanwhile it seems there is such a thing as bad publicity, despite what the marketing gurus may say. Ryanair’s brand image nosedived after cancellation crisis, according to a new Core Media study. Laura Slattery reports.

The Government is tying up the loose threads from Budget 2018. Earlier this week it extended the Benefit in Kind scheme for electric vehicles and now it has sought to clarify how commercial property buyers who agreed to buy a property before October 11th can avail of the old lower rate of stamp duty. Fiona Reddan has the details.

Given the damage wrought by Ophelia it may seem pretty logical to conclude the Irish insurance sector will be hit this year, but a review by Standard & Poor’s says future sector profitability is likely to remain constrained by a number of factors, including the increase in court awards and structural changes.

Gauging economic sentiment can be a pseudoscience, and you can take your pick from a raft of survey results this week. It seems there was no ‘budget bounce’ in the Republic, while in the North political uncertainty and Brexit has hit consumer sentiment. Yet taking the wider euro zone area into account the news is much brighter: consumer confidence has surged to a 17-year high.

In her media column this week Laura says Dublin’s music radio market is most exposed to industry changing habits of younger, urban listeners point to future shifts in audio consumption.

As many are learning to their cost, the State pension qualification system is full of quirks. In personal finance this week Fiona Reddan trying to untangle some of the issues faced by those who, perhaps, worked abroad or were a stay-at-home parent.

Finally, back to the Budget and the Government’s new tax plan for employee share options was dead on arrival, argues entrepreneur and venture capitalist Brian Caulfield. He outlines how the new scheme aimed at helping start-ups retain key employees, has several fundamental problems, “while some of the restrictions are staggeringly inept”.

Expansion of Northern Trust and Regeneron is turning city into employment hotspot

Tue, Oct 31, 2017, 00:01

Fiona Reddan

Biopharma firm Regeneron recently said it would create a further 300 jobs in Limerick as part of a $100 million expansion, bringing total headcount at the Limerick facility to 800 people




It may have suffered from some of the highest rates of unemployment in recent years, but Limerick’s economic recovery continues to gain pace, with a new survey revealing that it now has one of the strongest job-creation growth rates.

According to the Jobs Index from, Limerick is one of Ireland’s top performers in terms of new business growth, posting a 43 per cent increase in job vacancies in the third quarter of the year when compared to the same period in 2016, and 22 per cent on the second quarter of this year. This is due to employers such as Northern Trust and Regeneron expanding their operations.

This compares with overall growth rate of just 3 per cent, with growth also strong in Dublin (up 9 per cent) and Galway (up 16 per cent) but muted in Cork (up 1 per cent).

Across the country, hospitality accounted for the largest share of job vacancies (14 per cent) in the third quarter, followed by banking and finance (10 per cent), sales (9 per cent) and tech (8 per cent). Job vacancies in STEM sectors (science, pharmaceuticals and food) rose by 15 per cent.

‘Steady growth’

Orla Moran, general manager with, says the figures point to “another year of steady growth, with a sustained, albeit modest, increase in the number of jobs vacancies”.

However, she also struck a note of caution.

“While the Jobs Index results are positive, a number of challenges threaten continued economic growth. Despite some counties bucking the trend, we’re seeing rural Ireland lag behind in job creation. In the midlands and the southeast, unemployment rates are the highest in the country.”

She added that “the spectre of Brexit” also looms large and the slow pace of UK-EU negotiations may be lulling businesses into a false sense of security. “Many Irish employers are understandably cautious of committing to new recruitment until the macro-landscape becomes a little clearer,” she said.