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Numbers owning their own home in Dublin and across the country plunge to record lows

Tue, Nov 7, 2017, 06:00

Fiona Reddan

With pent-up supply, the scheme got off to a strong start, and as of the end of October there have been more than 11,000 applications from first-time buyers, some 4,500 of which have been claimed successfully. Photograph: Brian Lawless/PA Wire




Home ownership levels continued to decline in Dublin and across the country in the first six months of the year, despite the introduction of the Help to Buy scheme in January 2017. They have now hit a record national low.

A demand side measure with the ultimate aim of boosting supply and enabling first-time buyers purchase a home, the scheme, which offers a tax rebate of up to 5 per cent on the purchase price of a new house, was launched to much fanfare in January 2017.

With pent-up supply, the scheme got off to a strong start, and as of the end of October there have been more than 11,000 applications from first-time buyers, some 4,500 of which have been claimed successfully.

However, despite the measure, home ownership levels continue to fall to record lows. Unpublished figures from the Central Statistics Office (drawn from the Quarterly National Household Survey) show that in the first six months of the year the percentage of people owning their own home, as opposed to renting, fell back from 60.8 per cent to 60.1 per cent in Dublin. The decline was more marked across the country.

New low

Nationally (excluding Dublin), home ownership figures fell from 73.3 per cent as of end 2016 to 72.1 per cent as of June 2017, as the number of people renting jumped from 15.3 per cent to 16.8 per cent. This means the national figure fell to 68.7 per cent as of June , 2017, down from 69.8 per cent as of year-end 2016, representing a new low for Irish home ownership.

The number of people owning their own home reached a peak at about 80.1 per cent in 1991, but has been declining since, in line with trends in other countries; in the UK home ownership is at a 30-year low of 64 per cent, the lowest figure seen since 1986.

While it’s still too early to indicate the overall impact of the scheme, it would appear to have had limited impact on boosting home ownership – meaning that pressure continues to mount on the rental sector.

Barely budged

The experience in the UK has been similar. A report from Bloomberg found that ownership rates for first-time buyers have barely budged since the UK’s Help to Buy initiative started in 2013, as it concluded that the scheme has mainly helped purchasers who were well-off enough to have afforded a house anyway. Nine per cent of buyers aided by the government earned more than £80,000 a year Bloomberg found. Figures for the Irish scheme would also suggest that the scheme may be helping people who would have bought anyway, rather than those who may be most in need of assistance.

Indeed as our analysis of the scheme shows, given that almost one in two purchases (47 per cent ) were for properties worth €301,000 or more, half of those people applying for the scheme must have incomes of € 85,714 or more, while about one in five will have joint incomes of € 107,000 or more.

Home ownership hasn’t increased with Help to Buy – it’s actually fallen (% of population)

2016 (Q4)

Owner occupied

Private rented


2016 (Q4)

Owner occupied

Private rented


Source: CSO

Limited income growth a key inhibitor to consumer buoyancy, ESRI analyst says

Tue, Nov 7, 2017, 05:30

Fiona Reddan

KBC Bank Ireland chief economist Austin Hughes: said the latest figures for consumer sentiment continued the pattern of “one and a half steps forward, one step back”.




In the absence of a “giveaway” budget, Irish consumer sentiment weakened slightly in October, as expectations for economic growth continue to lag US and euro-area peers.

According to the KBC Bank Ireland/ESRI consumer sentiment index for October, consumer sentiment edged lower in October, with no major change in consumer thinking.

Austin Hughes, chief economist of KBC Bank Ireland, said the latest figures continued the pattern of “one and a half steps forward, one step back” that has characterised the monthly sentiment survey readings for the past year or so.

“The October sentiment reading is slightly disappointing but not entirely surprising,” he said, adding that a still clouded economic outlook and the lack of marked gains in spending power meant consumer confidence remained fragile. However, he added that the broad trend remained “reasonably positive and consistent with an Irish economy that is experiencing an ongoing but uneven upswing”.

Income growth

Conor O’Toole of the ESRI suggested that subdued views on personal finances may indicate that households are not experiencing a significant impact of the improving economy on their own circumstances.

A key inhibitor to consumer buoyancy is limited income growth, which means that “caution rather than confidence” is the key influence on Irish consumer behaviour at present Mr Hughes said.

The tenor of Irish sentiment contrasts with that elsewhere. In the US, for example, consumer sentiment posted its highest reading since January 2004 on upgraded views of household finances and the broader economy, while euro-area consumer confidence is at its strongest level since April 2001.

Mr Hughes said Irish consumers were suffering from a the lack of a self-reinforcing “feel-good” factor in the Irish economy that would drive confidence consistently higher.

“This reflects both the shadow cast by forces such as Brexit on the macro outlook and the scarring, both financial and psychological, that remains from the financial crisis.”

The KBC/ESRI report follows the Bank of Ireland Economic Pulse, which also showed that both consumer confidence and business sentiment remained subdued, with households and businesses in Dublin the most upbeat.

Minister for Finance to tell US congressional leaders global trade should be encouraged

about an hour ago

Patrick Smyth

Minister for Finance Paschal Donohoe: will visit the United States on an official trip next week. Photograph: Dara Mac Dónaill




The Minister for Finance Paschal Donohoe will use an official trip to the United States next week to lobby against Republican tax reform measures that could result in a 20 per cent levy being placed on funds moving between parts of a business in the US and abroad.

The change could hit foreign-owned multinationals with US affiliates and US companies, like many in Ireland, that used inversion deals to move their head offices overseas. The measure is one strand of Trump/Republican plans to cut corporate taxation.

The tax plan would impose a 20 per cent “excise tax” on payments between affiliates of the same company, payments that are commonly made as international divisions trade materials, services and royalties for intellectual property.

It is intended to encourage companies that have relocated their domicile to Ireland or elsewhere, by way of corporate inversions, to look again at their position.

Mr Donohoe, who was in Brussels on Monday for a meeting of EU finance ministers, will tell protectionist US congressional leaders next week that international trade between companies and countries is “mutually beneficial” and should be encouraged.

He will point out that “Irish companies in America now employ as many people as American companies employ in Ireland”. And that Ireland is combating aggressive tax avoidance by “implementing all of the OECD measures necessary to ensure that our tax code meets international expectation”.

‘Offshore operations’

Mr Donohoe told journalists in Brussels that he discussed the Paradise Papers disclosures on Monday with the Revenue Commissioners, who assured him they would be monitoring the revelations as they appeared over the coming days. “In the last number of years the revenue have collected €1 billion in taxation from companies and individuals that, in particular, were using offshore operations to avoid paying their tax liabilities,” Mr Donohoe said.

“Ireland will continue to play its role on a policy level in relation to making sure the right solutions and framework are in place to deal with individuals and companies which seek to avoid paying a fair level of taxation.”

He backed measures being taken in the EU to compile a blacklist of tax havens and said he believed such a list would be finalised by December.

“Ireland is and will play its part in fighting the aggressive avoidance of tax,” the Minister said. “We believe that everybody whether they be a company or individual should pay their tax fairly and pay a fair share of tax . . . Ireland would be one of the first countries to engage in the practice where our revenue commissioners would be able to share information with tax authorities in other jurisdictions and to ensure that assets or income are not being held in such a way as to reduce their ability to pay tax.

‘Tax transparency’

“It is why the OECD has given Ireland the highest rating in terms of tax transparency and the sharing of information “and we’re only one of 22 countries in the world to have that rating”.

Separately, ministers hope to finalise agreement on the revamp of VAT rules for ecommerce when they meet on Tuesday. There is broad support, including from Ireland, with some technical objections, which are expected to be overcome. The vote, like all those involving tax issues, is by unanimity. The proposals (a directive and two regulations) are aimed at making it easier to buy goods and services online, and will help to combat aspects of VAT fraud throughout the EU, estimated at €5 billion a year.

The commission argues the proposals could also reduce administrative burdens on companies trading in other EU markets by up to 85 per cent by abolishing the requirement to register for VAT in every member state.

The directive would create a “one-stop shop” for VAT payments and require the tax to be paid in the member state of the consumer.

Prime minister tells CBI’s conference that she is determined to support British business

about an hour ago

UK prime minister Theresa May speaking at the Confederation of British Industry annual conference in London on Monday. Photograph: Jason Alden/Bloomberg




Theresa May and Jeremy Corbyn both struck a conciliatory tone towards corporate Britain at the CBI’s annual conference on Monday, as business leaders warned they needed certainty on a Brexit transition deal by the end of the year.

Speaking to the business lobby group at London’s O2 centre, the prime minister called for a “strategic, long-term partnership” with business, and said she was determined to give “as much certainty as possible” on the Brexit transition period.

“The government I lead is determined to support British business,” she said, laying out the government’s strategy for a “stronger, fairer, better-balanced economy”.

Mrs May’s stance towards business has see-sawed since she became prime minister. She originally promised to promote better behaviour by companies, but then backed off from proposals such as introducing workers on British boards. Since the departure of advisers Nick Timothy and Fiona Hill, No 10 has made efforts to re-engage with business leaders and their concerns.

Labour party Mr Corbyn said, in a well-received speech to the 1,300 delegates, that there was “common ground” between business and the Labour party on the threat a “no deal” on Brexit posed to the economy.

“Many of you feel no closer to having the clarity about the direction of travel you so desperately need [than a year ago],” the Labour leader said, blaming “chaos and confusion at the heart of government”.

“Time is running out,” he said. “Guarantees are needed now to stop firms cutting the UK out of their business models.”

He said a transitional arrangement needed to be agreed immediately, and added that EU citizens working in the UK should be unilaterally guaranteed full rights to remain. “We agree on the need to signal that the UK remains open to the rest of the world, that Europe is not the enemy,” he said.

Delegates at the conference appeared impressed, albeit somewhat surprised, by Mr Corbyn’s pro-business tone.

After Paul Drechsler, the CBI president, compared the approach to Brexit to a soap opera, consultant Dina Medland said on Twitter that watching Mr Corbyn address the conference was like “switching from a soap suddenly to a hard news story about human issues — extraordinary delivery”.

Others applauded the confidence of his delivery.

Carolyn Fairbairn, CBI director-general, said: “Labour are right that agreeing a transition deal as soon as possible is mission critical to maintain business confidence. There is cross party agreement on this now and so this is the time for urgent action.”

Within his generally conciliatory message, Mr Corbyn repeated calls for employers to give British workers a pay rise, and said a Labour government would raise taxes and nationalise utility companies.

Ms Fairbairn responded: “Industrial strategy and Brexit must be focused on building a fair, innovative and productive UK economy where society benefits.” She added, “There are fundamental differences on the ways to get there.

“It is clear that competitive markets are the best way to improve people’s lives. Abandoning this model will hurt those who need help most and make the UK a laggard in the global race for investment.

Mrs May promised an industrial strategy that would set the “right frameworks” for business investment, without making a plan “for every corner of our economy”.

Her pledge was welcomed by the CBI, but Ms Fairbairn said: “These welcome words must be followed through: clarity on industrial strategy and Brexit ambitions must be matched with urgent delivery,” she said. “Firms will do all they can to make this happen.”

Gavin Patterson, chief executive of BT, had told the conference that BT was dependent on attracting workers from the EU and that it was “very urgent” to get clarity on the transition arrangements.

“From the beginning of next calendar year the value of a deal would begin to deteriorate,” he warned.

– Copyright The Financial Times Limited 2017

Central Bank data shows household debt as a proportion of disposable income also falls

about 9 hours ago

Eoin Burke-Kennedy

Central Bank figures show net worth rose by €16.9 billion in the second quarter, reflecting a substantial increase in the value of housing assets. Photograph: Dan Kitwood/Getty Images




The net worth of Irish households has risen by nearly 60 per cent since 2012 as a result of surging property prices, which have increased house asset values.

Figures from the Central Bank show the net worth of Irish households stood at €686.3 billion in the second quarter of 2017, up from €430 billion five years ago, and just 4.6 per cent lower than its peak of €719.6 billion in the second quarter of 2007.

The figures show net worth rose by €16.9 billion or 2.5 per cent in the second quarter of this year alone, reflecting a substantial increase in housing assets (€16.1 billion) and a decrease of liabilities (€1.5 billion) over the quarter, albeit this was offset by a decline in financial assets of €0.7 billion.

The improvement in household net worth is almost matched by improving debt metrics.


Irish household debt as a proportion of disposable income fell by 50 per cent between 2013 and June of this year, compared with just 3.3 per cent in the euro area as a whole.

The figures show overall Irish household debt stood at €141.7 billion or €29,576 per capita in June, which equated to 145.2 per cent of disposable income.

Despite the improvement, Irish households remained the fourth most indebted in the European Union behind Denmark,the Netherlands and Sweden.

Private-sector debt as a proportion of gross domestic product (GDP) fell 17.2 per cent over the quarter to 265.3 per cent, which was the lowest level since the beginning of the financial crisis.

The Central Bank said the fall in private-sector debt reflected both reductions in the stock of debt owed by both firms – excluding banks and other financial companies – and households, and an increase in annualised GDP, which has jumped significantly in recent years.

On a year-on-year basis, private-sector debt as a proportion of GDP has fallen by 51.6 per cent.


The Central Bank, however, cautioned that private-sector debt in Ireland was significantly influenced by multinationals and that restructuring by these entities has resulted in extremely large movements in Irish private-sector debt, particularly from 2014 onwards.

The figures showed Government debt rose during second quarter of 2017 by €2.4 billion to €232.3 billion primarily due to a €3 billion increase in Government-issued debt securities, which was offset by a €0.7 billion reduction in Government loan liabilities.

However, the net financial wealth of Government increased by €2.5 billion over the quarter, as Government assets increased faster than liabilities.

Government holdings of equity shares fell by €2.8 billion during the quarter, a reduction of 7.1 per cent compared with the previous quarter, primarily due to the sale of part of the Government’s equity stake in Allied Irish Banks.

Donald Trump’s commerce secretary Wilbur Ross says agreement should be reached

about 10 hours ago

Wilbur Ross identified continued “passporting” of financial services as one potential problem.




“Landmines” in the UK’s Brexit deal with the European Union could get in the way of the swift conclusion of a free trade agreement (FTA) with the US, Donald Trump’s commerce secretary has warned.

Wilbur Ross identified continued “passporting” of financial services, compliance with EU food standards on GM crops and chlorine-washed chicken and future trade tariffs as areas which could pose problems in negotiations between the US and UK following Brexit.

But he said it would not be possible to identify specific points of contention until the shape of the divorce deal is known and insisted he hopes a UK-US FTA will take less than 10 years to negotiate.

Mr Ross was on the last day of a five-day visit to the UK for “scoping” talks designed to ensure trans-Atlantic trade and travel continues smoothly after the Brexit date of March 2019.

He met Theresa May and senior ministers including Philip Hammond, Boris Johnson, David Davis and Liam Fox during the trip.

The visit allowed him to “address with the UK some concerns we have that they may be tempted to include (provisions) in their agreement with the European Commission (EC) that could be problems for a subsequent FTA with the US”, he said.

He made clear the US favours the continuation of many of the UK’s current arrangements with the EU, particularly on the passporting rights which allow UK-based companies to offer financial services in the other 27 member states and have made London a gateway into Europe for many American banks.

Any change to historic passporting arrangements “may facilitate or complicate doing something with us”, he suggested.

He added: “To the degree that it turns out there is a change and to the degree that it’s a complication, that could become a real barrier in services.

“I’m not suggesting that it is or that it will be, because we don’t know – we have no idea what’s going to be the UK-EU version.”

Mr Ross said: “It’s been a great convenience for many American companies – financial institutions particularly – to base themselves here in London and have passporting activity. We do need ways to have access to the EU.”

In other areas, such as food standards and tariffs, he said Washington would like to see some “nudging” of the UK position to adopt a less protectionist stance than Brussels.

Despite its free trade rhetoric, Mr Ross said the EU was “in fact quite protectionist”, imposing tariffs of 10 per cent on automobile imports, compared to 2.5 per cent in the US, and applying country-of-origin rules which in Washington’s view are “adverse to US food producers”.

“The European Commission has been trying very hard to get European standards adopted by third party countries, as opposed to US standards,” said Mr Ross.

Sanitary restrictions imposed by the EU on food products like GM crops and chlorine-washed chicken were “really not science-based”, he said.

If the UK agreed in its Brexit deal to continue complying with them, “it potentially could create problems with us”.

Mr Ross described an FTA with the UK as a priority for Washington, but admitted that it would be “very complex” to complete.

But he played down suggestions that negotiations could drag on for years, pointing out the Trump administration was aiming to conclude a renegotiation of the Nafta deal with Canada and Mexico in less than a year.

Asked whether a UK FTA could take as long as 10 years, he said: “I hesitate to put an exact parameter of dates on it. Hopefully not a decade.”

He added: “It isn’t that I’m forecasting that it will take a decade … It’ll take whatever time it takes, but given the good relationship between the two countries and assuming that the scoping exercise turns out to be fruitful and further assuming that there are no big landmines in the exit agreement between the UK and the EC, then it shouldn’t take terribly long.

“We are trying to redo Nafta in less than a year. That’s a very much more complicated situation even than we would have with the UK. It really depends on the parties.”

Mr Ross played down suggestions that a “cliff edge” Brexit could stop airlines flying between UK and US airports, saying that a new Open Skies arrangement should be achievable “pretty quickly”.

In response to calls from some Eurosceptics for a no-deal “clean break” Brexit, Mr Ross said: “I don’t know what a clean break would really mean.

“The EU is a very important trading partner of the UK. I very much doubt that UK car manufacturers would want to be subject to a 10 per cent tariff going into the EU. It’s easy to use slogans like ‘clean break’, but what does it really mean?”

On Washington’s preferred shape for a Brexit deal, he said: “In many areas it would be fine if the UK just inherited the existing relationships from EU, but there are a few where some nudging perhaps would be useful.”

He declined to say what “tit-for-tat” trade-offs might be needed to secure an FTA:

“We are talking about an agreement where the negotiation can’t even start for a couple of years and very much will be conditioned by the terms of the departure agreement between UK and EU,” he said.

“It’s hard to anticipate where the easy parts and hard parts will be.”


Producer prices herald changes to consumer inflation, because their increase is usually passed on to the consumer

about 11 hours ago

Fiona Reddan

(More expensive energy and intermediate goods pushed up euro zone prices at factory gates more than expected in September, data from the European Union’s statistics office showed on Monday. (Photograph: ANDY BUCHANAN/AFP/Getty Images)




More expensive energy and intermediate goods pushed up euro zone prices at factory gates more than expected in September, data from the European Union’s statistics office showed on Monday.

Producer prices in the 19 countries sharing the euro rose 0.6 per cent month-on-month in September for a 2.9 per cent year-on-year increase. Economists polled by Reuters had expected a 0.4 per cent monthly rise and a 2.8 per cent annual gain.

Energy prices rose 1.5 per cent month-on-month and jumped 4.6 per cent year-on-year.

Producer prices herald changes to consumer inflation, because their increase is usually passed on to the consumer.

The European Central Bank wants to keep consumer inflation below, but close to 2 per cent over the medium term and is buying government bonds on the secondary market to inject more cash into the economy and stimulate price growth.

But it halved the amount of monthly purchases to €30 billion as economic growth picks up.