Tag Archives: economy
Rents rise in every county in Ireland, latest quarterly rental report shows
Rents are now more expensive than they were at the same stage last year in every county in Ireland, according to the latest quarterly rental Report by Daft. Nationally, rents have risen by over 11% in the space of 12 months with the national average rent now €933 compared to €842 a year previously, the data from the property firm also shows. However, Dublin's annual rate has slowed for the first time in five years, but prices have still risen by over 14% in the capital since the last three months of 2013. In the other city centres, rents continue to climb. Waterford experienced an annual rise of 5%, Limerick 6%, Galway 7% and Cork 8%. Most of Dublin's neighbouring counties also continue to see double digit inflation with Meath witnessing growth of 11%, Wicklow 13% and Kildare 14%. The number of properties available to rent has continued to plummet. At the beginning of November there were fewer than 5,400 properties to rent nationwide, the lowest figure since May 2007. ‘In many ways, the lack of available properties to rent is more concerning than the high rental rates, although clearly the two phenomena are inextricably linked,’ said Ronan Lyons, economist at TCD and author of the Daft Report. ‘The only silver lining is the fact that this quarter was the first time in five years that rent inflation in the capital eased somewhat. However, even if an easing in Dublin inflation continues and stops the affordability crisis from worsening, it does nothing to change the availability crisis,’ he added. A breakdown of the figures shows what has been happening in the major cities. In Dublin rents are up 16.6%, in Cork 7.9%, Galway 7.2%, Limerick 6.4% and Waterford up 4.5%. Rents continued to rise throughout the country between August and October, according to the figures published in the report. Over the last two years, the average rent nationwide has risen by almost €150, from €790 a month to €933. As has been documented in previous issues of this report, that national trend is being driven by Dublin, where rents are up an average of €300 a month since 2012. But the latest figures show that rental inflation outside the cities is above what might be considered a healthy rate, in line with the rest of the economy. While prices in the rest of the economy were roughly flat in the year to October, rent inflation stayed above 10%. An analysis of the figures show that while there has been some uptick in non-city rents, particularly in Leinster, average monthly rents remain well below their 2007 levels, typically by about 20%. In Dublin rents are now almost 30% above their lowest point in 2012 and less than 10% below their 2007 peaks. Lyons said that this is very damaging for Dublin's competitiveness as a location for foreign direct investment. ‘The goal of housing policy should be to ensure that, regardless of whether it's to rent or to buy, rural… Continue reading
UK construction industry gets boost from improved home lending
The UK government’s Help to Buy scheme and a renewed willingness by banks to lend to home owners has boosted the construction industry, it is claimed. The latest official figures from the Office of National Statistics shows that output in the construction industry in the third quarter of 2014 increased by 0.8% compared to the previous quarter. The ONS data also shows growth of 2.9% between the third quarters of 2013 and 2014, the sixth consecutive period of annual quarter on quarter growth. Most recently, in September 2014, output in the construction industry was estimated to have increased by 1.8% compared with August 2014, following a fall of 3% in August and an increase of 2% in July. On the year, the picture is of continued growth, with output in the construction industry increasing by 3.5% in September 2014 compared with September 2013. Housing, as a sub-element of all construction output, was worth £6.77 billion in the third, up 5% on the second quarter and 22% higher than in the third quarter of 2013. Within housing, output by the private sector has grown 19% since the third quarter of last year, while construction by public organisations grew by 35% on an annual basis According to David Newnes, director of Your Move and Reeds Rains estate agents, The Help to Buy scheme and a renewed willingness on the part of banks to lend to borrowers with smaller deposits played a significant part in boosting demand all across the country, giving first time buyers a better shot at the goal of home ownership. ‘This injected new energy into the construction sector, but although house building is making headway across the pitch, we’re still a long way from seeing the form that was in evidence before the crash,’ he said. He pointed out that households received a welcome boost in the cost of living game with the news that wage growth is beating inflation, but dogged demand for housing must be matched with a new charge of supply if the cost of housing is to be kept within the grasp of new buyers. ‘House price inflation may have been reined back from the intensity witnessed earlier this year, but in the long term building new homes remains key to ensuring that competition over available property and price rises stay at healthy levels, and don’t eat away at consumer confidence,’ he explained. ‘Higher LTV lending dipped last month, as new loan to income caps came into force. We need to ensure that the bottom of the market stays firm, anchored on a solid bedrock of plentiful supply of starter homes,’ he added. Andrew Bridges, managing director of specialist London estate agents Stirling Ackroyd, believes that gradual progress won’t be enough for the construction industry. ‘This growth is still slower than the rest of the economy and not yet fast enough to capture the true scale of opportunity,’ he said. ‘Homes are most sharply sought after, and that’s reflected in the best figures for the housing portion of output… Continue reading
Latest index data confirms slowdown in price growth and sales in UK market
House prices in the UK are slowing both on a monthly and a quarterly basis, confirming the general decline in value growth, according to the latest index from the Halifax. In the August to October 2014 period prices were 0.8% higher than in the previous three months and this is the slowest quarterly rise since December 2012 when house prices grew by 0.7%. The sharp fall in the quarterly rate from 2.7% in September is largely explained by the 4% monthly rise in prices between April and May dropping out of the three month on three month calculation, according to Martin Ellis, Halifax housing economist. Prices in the three months to October were 8.8% higher than in the same three months a year earlier and based on this measure, annual house price growth has been slowing since the middle of summer after reaching a peak of 10.2% in July. The index data also shows that house prices fell by 0.4% between September and October, the fifth monthly decline in the past year. Home sales are also falling. They contracted for the seventh month in succession, falling to 97,450 in September, the lowest level since October 2013 when they were 95,640. Sales in September were 11% below their recent in peak in February 2014 at 109,530 according to HMRC, seasonally adjusted figures. At the same time mortgage approvals at a 14 month low. The volume of mortgage approvals for house purchases, a leading indicator of completed house sales, fell for the third consecutive month in September, to 61,300. Approvals have now fallen by 20% from 76,500 in January 2014 according to Bank of England seasonally adjusted figures. There are signs of an improved balance between supply and demand. Market conditions, as measured by the ratio of house sales to the stock of unsold properties, reported by the Royal Institution of Chartered Surveyors’ (RICS) monthly survey, eased for the second consecutive month in September as a result of lower sales, according to the latest data. This suggests that a better balance between supply and demand may be emerging. Ellis pointed out that the economy is continuing to grow at a healthy pace and employment is still rising and these factors should support housing demand over the coming months. ‘However, while the chances of an imminent interest rate hike may have receded, a recent Halifax survey found that many borrowers are concerned about the impact a rise could have on their monthly mortgage repayments over the next 12 months. This concern is likely to curb buying intentions,’ he added. It feels like the market has had a small stutter, according to Jonathan Hudson, of London west end agent Hudson Property. ‘While buyers are getting used to the new MMR ruling on mortgage affordability and while some have their eye on the general election in May, I would say these figures represent the mood in the market,’ he said. ‘People are still buying, but only sellers with a reason for moving are accepting… Continue reading
