Where we were, where we want to be - infant feeding in the context of HIV and ARVs
Where we were
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Transcript of Where we were
MR JOHN A MORAN, SECRETARY GENERAL , DEPARTMENT OF F INANCE‘SUPPORTING A SUSTAINABLE PROPERTY MARKET,’ P I I JUNE 28, 2012
Strictly private and confidential 1
2
Where we were
Economic Growth
driven by a property bubble
Rapid employment
growth
As employment and income rose, house
prices increased
Construction rose –
increased unemployment – further construction
By 2006 construction
accounted for 20% of GNP
Over reliance on property related tax revenues
Stamp duty on Property in 2006 was €2.99 billion
SHARP CHANGES IN UNEMPLOYMENT NUMBERS
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Pe
rc
en
t
ECONOMY TOO DEPENDENT ON HOUSE BUILDING…
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Department of Financeforecasts
2012 to 2015
Sources – CSO and DoF
3
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 FitzgeraldNow have an
additional 4,000+ registered buyers
compared to previous year
4
Property prices – Are they further proof of stabilisation?
Residential Property Prices fell by15.3% 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 pricesrose by 0.2% in May, following a rise of 0.5% in April; the rest of Ireland fell by 2% in April.
Overall DeclineNational 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 lowerat 47% (Source - Central Statistics Office)
5
IBF Mortgage Lending 2005 - 2008
6IBF/PwC Mortgage Market Profile
New Lending down in Q1 2012 after signs of improvement in previous QuartersNew Lending
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
0
1000
2000
3000
4000
5000
6000
Number€m
- 31.8%
New Lending
Number €m
Q1 2012 2,630 450
Q4 2011 3,856 639
Q3 2011 3,607 623
Q2 2011 3,551 624
Q1 2011 3,259 577
Q4 2010 5,624 982
Q1 2012 – decrease in loans issued compared to Q1 2011 down 19.3%
- 31.4%
7
IBF / PwC Mortgage Market ProfileQuarterly 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.
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Some Existing Initiatives to lift Property Market
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%
NAMA 80:20 Deferred Payment Initiative
Budget 2012 Priority Areas of Focus
9Strictly private and confidential
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
Decision to Buy
Improving Affordability
Unemployment Pay Cuts
Housing Pricing Risk
Favourable long-term
demographic trends
Credit Availability
10Strictly private and confidential
The Irish Housing Market – David Duffy and John Fitzgerald
Number Renting by Age Cohort Demographic Drivers of the Demand for Dwellings, Thousand per Year
Ratio of the User Cost of Housing Relative to Renting Population by Year of Age
The over-supply picture……or is it?
12Strictly private and confidential
The Irish Housing Market – David Duffy and John Fitzgerald
Some Further Initiatives Suggested……
Extend Mortgage Approvals to 6 months
Clearer Communications on Market Conditions
National Property Forum
New Bank products, e.g, emigrant purchase loans
Negative Equity Mortgages
National House Price Register
Tax Incentives
What else?
14Strictly private and confidential
Next Steps
Priority for the Government
Action Points from this morning’s
seminar will feed into the process
Establish and Inter-departmental group (along the lines of Keane Report) to consider actions
that could be deployed to address the
property situation
Continued engagement between the
Department of Finance,
stakeholders, the banks and the IBF