Transcript Permanent TSB Integration Executive Update

permanent tsb
House Price Index
10 Year Review
House Price Index
10 Year Review
2
Key findings

National annual price growth averaged 14.9% over the last 10
years.

Ten year growth rate nationally 270%.

1998 had highest annual price growth (30.0%) & 2001 had
lowest (4.5%).

National house price grew from €75k to €280k between 1996 &
2005.

Price gap between Dublin and Outside Dublin increased from
€10k to €130k between 1996 and 2005.
House Price Index
10 Year Review
3
Key findings continued

Key drivers of past price growth - favourable economic &
interest rate environment; increasing population.

External shocks have impacted on general growth trends.

1/

Value of the Housing Stock has grown 4 fold to €412bn in last 10
years (Source ESRI).
3 of
current housing stock (547,000) was built in last 10 years.
House Price Index
10 Year Review
4
Agenda
 Market changes and drivers
 Price trends
 Property ownership patterns
5
House Price Index
10 Year Review
Market changes
and drivers
6
House Price Index
10 Year Review
Average annual growth 14.9%over the last 10 years.
35%
30%
30.0%
25%
€150k
20%
15%
€250k
€100k
€290k
€85k
10%
€200k
5%
2.4%
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House Price Index
10 Year Review
7
A number of Government tax/grant changes have introduced
in the last 10 years.
35%
Flat 9%
Stamp duty
on all
Investor
properties
introduced.
30%
25%
20%
Interest relief
on rental
properties
restored
Stamp Duty
rates for
Investors tiered
up to 9%
15%
10%
5%
Rent a room
scheme
introduced
FTB's grant
abolished
Intro. of Stamp duty
exemption for FTBs on
2nd hand homes
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0%
Residential Property
tax abolished & tax
relief on homeloan
interest introduced.
House Price Index
10 Year Review
8
A number of Government tax/grant changes have been
introduced in the last 10 years.
35%
30%
25%
20%
Bacon 2
Bacon 1
15%
Flat 9%
Stamp duty
on all
Investor
properties
introduced.
Interest relief
on rental
properties
restored
Stamp Duty
rates for
Investors tiered
up to 9%
Bacon 3
10%
5%
Rent a room
scheme
introduced
FTB's grant
abolished
Intro. of Stamp duty
exemption for FTBs on
2nd hand homes
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0%
Residential Property
tax abolished & tax
relief on homeloan
interest introduced.
9
House Price Index
10 Year Review
GNP influence on house price growth.
12%
35%
10.3%
9.5%
10%
8.5%
8%
30%
GNP
Price Growth
7.7%
25%
20%
6%
4%
5.4%
5.1%
4.0%
3.9%
2.7%
10%
2%
5%
0%
0%
ar
Se 9 7
pM 97
ar
Se 9 8
pM 98
ar
Se 9 9
pM 99
ar
Se 0 0
pM 00
ar
Se 0 1
pM 01
ar
Se 0 2
pM 02
ar
Se 0 3
pM 03
ar
Se 0 4
pM 04
ar
Se 0 5
pM 05
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-0
6
M
15%
House Price Index
10 Year Review
10
Fertile economic and interest rate environment has
significantly helped the market thrive.
35%
Start of EMU
30%
6.5%p.a.
Loan rate
25%
15%
1996 - 2005
3.75%
Loan rate
20%
GNP averaged
7.5%
Ireland EMU
member
10%
5%
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6
0%
House Price Index
10 Year Review
11
External shocks seem to have influenced house price growth
over the last 10 years.
35%
30%
Foot &
Mouth
25%
US led Invasion of
Afghanistan
Economist &
20%
IMF warnings
15%
IMF warning
10%
5%
9/11
TECH
Bubble
War in Iraq begins
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0%
12
House Price Index
10 Year Review
Affordabilty broadly stable since 1998.
as % od personal disposable income per person
employed
House Purchase Affordability, Mortgage Service Costs
45
40
35
30
25
20
15
10
5
0
1996
2001
20 yr
25 yr
35 yr
Notes: Affordability is measured by the annual mortgage service cost as a % of personal disposable income
per person employed, mortgage size based on an assumed loan-to-value ratio of 90 per cent in each year.
Data is from the Department of the Environment Housing Statistics Bulletin and the ESRI macromodel.
13
House Price Index
10 Year Review
Price trends
14
House Price Index
Selected price growth rates from 1996 to 2005.
300% 270%
230%
250%
200%
150%
100%
30%
50%
70%
60%
40% 52%
ex
In
d
IS
EQ
Ci
gs
20
ut
(p
in
t)
s
St
o
Re
nt
er
In
de
x
Pe
tro
l(
lt)
ns
um
Ho
us
es
0%
Co
10 Year Review
House Price Index
10 Year Review
15
Price gap between Dublin and Outside Dublin has widened to almost
€130k in last 10 years
400,000
National
Outside Dublin
300,000
Dublin
200,000
368,576
277,852
240,201
92,342
100,000
79,682
December prices
73,928
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
16
House Price Index
Urbanisation/ commuting/ demand for second homes key drivers of
regional differences.
10 Year Review
€’000s
1996
2005
400
347
314
300
290
260 244 241 233 233
200
100
average prices
W
So
es
t
ut
h
Ea
st
Bo
rd
M er
id
lan
d
M
id
we
st
6 month
Du
bl
i
M n
So id ea
ut
st
h
W
es
t
-
17
House Price Index
10 Year Review
Top 5 and bottom 5 areas by 10 year growth rates.
1996
96-'00
2000
01-'05
2005
96-'05
Wicklow
84,763
158%
218,723
59%
347,158
310%
Dublin
92,342
144%
225,368
64%
368,576
299%
Cork city
76,855
126%
173,536
76%
306,117
298%
Tipperary
57,006
104%
116,299
94%
225,415
295%
Laois
57,090
138%
135,791
66%
225,231
295%
Longford
67,986
78%
121,170
77%
214,527
216%
Monaghan
83,813
81%
151,411
72%
260,559
211%
Galway
92,588
71%
158,184
81%
286,478
209%
Leitrim
66,077
82%
119,939
67%
199,827
202%
Roscommon
75,129
66%
124,872
77%
221,509
195%
Note : Dublin prices are end of year levels, while other prices are yearly average.
House Price Index
10 Year Review
18
House prices for a first-time buyer and non-FTB now diverge by over
€60,000.
400,000
FTB
STB
300,000
200,000
311,168
249,499
89,921
100,000
69,792
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
December prices
House Price Index
10 Year Review
19
Prices for New and Existing properties have grown by more than
three fold, while price gap has remained unchanged in last 10 years
300,000
New
Existing
283,708
276,215
200,000
100,000
85,906
78,045
December prices
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
House Price Index
10 Year Review
20
Majority of properties now priced over €250k compared to 1996 when
most were less than €100k.
2000
1996
17%
11%
1%
12%
77%
82%
2005
< 100k
€100k- 250k
0%
> €250k
45%
55%
21
House Price Index
10 Year Review
Property ownership
patterns
House Price Index
10 Year Review
Semi-detached continues to be most common
property type
18
20
Terraced
40
Semi-D
35
27
Detached
23
Bungalow
8
16
8
Apartment
6
2005
1996
22
House Price Index
10 Year Review
1,500
1,400
Property size shows no change in Dublin,
increasing in the rest of Ireland.
Dublin
Outside Dublin
National
1,326
1,229
1,300
1,402
1,314
1,252
1,153
1,200
1,100
23
1,015
1,060
1,064
1,000
1996
2000
2005
.
Size in sq. ft
House Price Index
10 Year Review
50.0%
40.0%
24
Significant rise in the percentage of apartments within DUBLIN
properties since 1996.
45.4%
1996
46.6%
Dublin
2005
29.0% 28.9%
30.0%
18.0%
20.0%
12.2%
10.0%
9.6%
3.8%
5.3%
1.2%
0.0%
APT
BUN
DET
S/D
TCE
House Price Index
10 Year Review
25
Commuter counties (Meath; Wicklow; Kildare; Louth)
profile moving towards Dublin.
50.0%
45.1%
1996
40.0%
38.5%
2005
counties
30.0%
19.2%
25.4%
23.3%
15.1% 16.3%
20.0%
10.0%
Commuter
9.1%
6.2%
1.8%
0.0%
APT
BUN
DET
S/D
TCE
House Price Index
10 Year Review
40.0%
35.0%
30.0%
26
Almost 75%of properties OUTSIDE DUBLIN are detached or semidetached; apartment percentage unchanged since 1996.
38.3%
1996
2005
34.2%
32.6%
Outside
25.7%
23.5%
25.0%
20.0%
Dublin
15.7%
11.8%
15.0%
10.0%
2.9%
2.5%
5.0%
0.0%
APT
BUN
DET
S/D
TCE
12.8%
House Price Index
10 Year Review
Solid fuel
Dramatic change in heating source over last
10 years
2
25
47
Oil
38
45
Gas
Electricity
27
29
6
7
2005
1996
28
House Price Index
10 Year Review
Summary
House Price Index
10 Year Review
29
Summary & Conclusions

National annual house price growth averaged almost 15% ‘96 - ‘05.

National price increased from €75k in 1996 to €280k at end of 2005.

GNP averaging 6.5% and interest rates down to half pre EMU levels
key market drivers.

Affordability broadly stable since 1998.

Dublin and Outside Dublin price difference grown from €10k to €130k

Significant variation in ten year price growth across counties.

55% of properties priced over €250k in 2005 - just 1% in 1996.

50% increase in no. of apts within Dublin properties over 10 yrs.

Properties Outside Dublin getting larger while Dublin ones unchanged
30
House Price Index
10 Year Review
Appendices
House Price Index
10 Year Review
Dublin
Wicklow
Kilda re
Cork city
Me a th
Ga lw a y
Cork county
Kilke nny
Mona gha n
Ke rry
We stme a th
Cla re
We x ford
Sligo
Ca rlow
Ca va n
Lime rick
Ma yo
Louth
Offa ly
Tippe ra ry
La ois
Wa te rford
Roscommon
Longford
Done ga l
Le itrim
Price ga p
Top to
Bottom
31
County price differentials have widened significantly,
especially in the last five years.
1996
92,342
84,763
80,371
76,855
86,152
92,588
73,114
72,218
83,813
67,874
67,922
69,330
65,953
75,801
61,041
67,626
72,940
69,838
66,753
61,146
57,006
57,090
64,609
75,129
67,986
61,463
66,077
€
35,336
96-'00
144%
158%
135%
126%
120%
71%
103%
82%
81%
82%
107%
100%
102%
88%
103%
95%
88%
71%
141%
106%
104%
138%
113%
66%
78%
97%
82%
2000
225,368
218,723
188,805
173,536
189,373
158,184
148,492
131,227
151,411
123,464
140,399
138,799
133,256
142,429
124,128
131,740
137,087
119,732
161,197
125,971
116,299
135,791
137,875
124,872
121,170
120,997
119,939
€
64,171
01-'05
64%
59%
63%
76%
57%
81%
91%
99%
72%
105%
75%
76%
83%
69%
91%
80%
69%
91%
42%
81%
94%
66%
63%
77%
77%
70%
67%
2005
368,576
347,158
307,589
306,117
296,508
286,478
284,355
260,992
260,559
253,673
245,664
244,415
244,042
241,217
237,685
236,749
231,332
229,121
228,943
227,470
225,415
225,231
224,629
221,509
214,527
205,155
199,827
€
168,749
Note : Dublin prices are end of year levels, while other prices are yearly average.
96-'05
299%
310%
283%
298%
244%
209%
289%
261%
211%
274%
262%
253%
270%
218%
289%
250%
217%
228%
243%
272%
295%
295%
248%
195%
216%
234%
202%
House Price Index
10 Year Review
32
Housing completions continue to set new records
Source: Department of the Environment (DOE)
HOUSE COMPLETIONS
90,000
80,957
76,954
80,000
68,819
70,000
57,695
52,602
60,000
46,512 49,812
50,000
42,349
38,842
40,000 33,700
20
05
20
02
20
03
20
04
19
99
20
00
20
01
19
96
19
97
19
98
30,000
House Price Index
10 Year Review
Population - almost 50%(1.8m) of the pop. aged < 30. Net
inward migration accounted for almost half of 65,000 total
pop. growth to April 2004 (Source CSO).
Age range split of
Ireland's 4.04m population
18%
17%
15%
16%
14%
15%
14%
13%
14%
11%
12%
10%
(0-10)
(10-20)
(20-30)
(30-40)
(40-50)
(50-60)
(60+)
33
34
House Price Index
10 Year Review
REGIONAL LISTING
 BORDER - Cavan; Donegal; Leitrim; Louth; Monaghan; Sligo.
 MIDEAST - Kildare; Meath; Wicklow.
 MIDLANDS - Laois; Longford; Offaly; Westmeath.
 MIDWEST - Clare; Limerick; Tipperary North.
 SOUTH EAST - Carlow; Kilkenny; Wexford; Waterford; Tipperary South.
 SOUTH WEST - Cork; Kerry.
 WEST - Galway; Mayo; Roscommon.