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Central Bank of Ireland/Society of Chartered Surveyors Ireland: Survey of Property Professionals 2013Q1 Results: Circulated June 2013 PLEASE NOTE: THE RESULTS/FINDINGS OF THE SURVEY OF PROPERTY PROFESSIONALS 2013Q ARE PRESENTED WITHIN. THE PURPOSE OF THIS PRESENTATION IS TO PROVIDE INFORMATION TO THOSE WHO PARTICPATED IN THE SURVEY, CENTRAL BANK OF IRELAND STAFF & THE SCSI. WE ASK THAT THIS DOCUMENT NOT BE PUBLICLY QUOTED OR CIRCULATED FURTHER. • Price expectations SURVEY HIGHLIGHTS – for the 1st time in the survey, the percentage of participants expecting national prices to fall over the coming year has dropped below 50 per cent, meanwhile the percentage indicating that prices will remain static over the same period has risen – over the 3 year horizon, respondents tend to be more positive with a significant majority anticipating price increases – the outlook for Dublin prices continues to be more optimistic than at the national level, and while there is little consensus on what may happen regional prices over the coming year, the popular view across all regions is that they will be higher in 3 years time • Market activity – over 50 per cent of respondents indicated that they were busier this quarter than last in terms of sales agreed, enquiries from potential purchasers and vendor instructions – FTBs continue to be considered the most active cohort, despite the withdrawal of Mortgage Interest Relief for 1st time buyers • Market issues – in terms of the market issues highlighted, availability of credit remains a chief concern while the sense that prices are at, or at least approaching a floor, is cited by many as a positive SURVEY 2013Q1 SELECTED RESULTS (PRICE EXPECTATIONS) SURVEY 2013Q1 vs. SURVEY 2012Q4: CURRENT QUARTER PRICE EXPECTATIONS Chart 1: Expectations of Q-on-Q change in residential property Chart 2: Expectations of Q-on-Q change in residential property prices (National): 2013Q1 prices (National): 2012Q4 per cent per cent 10 20 30 40 50 60 70 80 90 100 0 per cent per cent 0 Negative No Change Positive 45 45 40 40 35 35 actual change 2012Q4 30 30 25 25 20 15 10 20 30 40 50 60 70 80 90 100 50 50 Negative No Change Positive actual change 2012Q4 20 actual change 2013Q1 actual change 2012Q3 15 10 5 5 0 0 >10 10 9 8 7 6 5 4 3 2 1 no change -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 <-10 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 No change -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -11 -12 -13 -14 -15 -16 -17 -18 -19 -20 10 Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 56 responses Note: Chart based on 115 responses SURVEY 2013Q1 vs. SURVEY 2012Q4: +1 QUARTER PRICE EXPECTATIONS Chart 3 : Expectations of Q-on-Q change in residential property Chart 4: Expectations of Q-on-Q change in residential property prices (National): 2013Q1 prices (National): 2012Q4 per cent per cent 10 20 30 40 50 60 70 80 90 100 40 Negative No Change Positive per cent per cent 0 45 0 10 20 30 40 50 60 70 80 90 100 45 40 35 35 30 30 25 25 Negative No Change Positive 20 20 15 15 10 10 5 5 0 >10 10 9 8 7 6 5 4 3 2 1 no change -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 <-10 > 15 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 No change -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -11 -12 -13 -14 -15 < -15 0 Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 55 responses Note: Chart based on 128 responses SURVEY 2013Q1 vs. SURVEY 2012Q4: +1 YEAR PRICE EXPECTATIONS Chart 5: Expectations of Y-on-Y change in residential property Chart 6: Expectations of Y-on-Y change in residential property prices 2013Q1-2014Q1 (National): 2013Q1 prices over 2013 (National): 2012Q4 per cent per cent 70 60 50 40 30 20 100 90 80 25 Positive No Change Negative 0 per cent per cent 10 0 30 10 20 30 40 50 60 70 80 90 100 22 20 18 Negative No Change Positive 16 20 14 12 15 10 8 10 6 4 5 2 0 > 12 12 10 9 8 7 6 5 4 3 2 1 No change -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -12 < -12 14 10 12 8 9 7 6 4 5 3 2 no change 1 -2 -1 -3 -4 -6 -5 -8 -7 -9 -10 -14 -12 0 Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 56 responses Note: Chart based on 124 responses REASONS PROVIDED FOR SHORTER-TERM PRICE EXPECTATIONS – negatives: difficulties obtaining credit, continuing economic uncertainty & job insecurity, introduction of the LPT* & withdrawal of MIR** for FTBs, purchasers fear further falls in prices, extent of emigration, current level of excess supply in certain regions may be exacerbated by widespread repossessions, vendors unrealistic on asking prices – positives: belief the bottom has been reached, credit conditions improving a little, economy showing signs of stability/some job announcements/progress in public finances having a positive impact on confidence, units more affordable, increased activity of cash buyers, release of pent-up demand, lack of supply in certain areas pushing prices up SURVEY 2013Q1 vs. SURVEY 2012Q4: +3 YEARS PRICE EXPECTATIONS Chart 7: Expectations of change in residential property Chart 8: Expectations of change in residential property prices 2013Q1-16Q1 (National): 2013Q1 prices 2013-15 (National): 2012Q4 per cent per cent 0 10 20 30 40 50 60 70 80 90 per cent per cent 20 Negative 18 No Change 0 100 22 Positive 10 20 30 40 50 60 70 80 90 100 22 20 18 16 16 14 14 Negative No Change Positive 12 12 10 10 8 8 6 6 4 4 2 2 0 25 20 18 16 14 12 10 8 6 4 2 no change -2 -4 -6 -8 -10 -12 -14 -16 -18 -20 -25 20 >< 25 20 18 16 14 12 10 8 6 4 2 No change -2 -4 -6 -8 -10 -12 -14 -16 -18 -20 -20 <> -25 0 Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 52 responses Note: Chart based on 119 responses REASONS UNDERLYING LONGER-TERM PRICE EXPECTATIONS – negatives: prospect of further harsh budgets, fears of a delay/setback in the economic recovery and/or resolution of banking difficulties which will impact credit availability, continuing emigration, fallout from arrears/insolvency process potential for a large overhang of stock – positives: existence of a large cohort of the population at household formation age, increased level of investor confidence expectations that a recovery in the Irish & European economies will take hold, progress made tackling unemployment and debt/insolvency issues, feeling that banking problems will have been addressed and reasonable access to credit restored, improvements in affordability. +1 YEAR (LHS) & +3 YEARS (RHS) PRICE EXPECTATIONS (SURVEY 2013Q1): NATIONAL VS. DUBLIN Chart 9: Expectations of Y-on-Y change in residential property Chart 10: Expectations of change in residential property prices 2013Q1-2014Q1 (National vs. Dublin): 2013Q1 prices 2013Q1-16Q1 (National vs. Dublin): 2013Q1 per cent per cent per cent 25 25 National per cent 25 25 National Dublin Dublin 20 20 20 20 15 15 15 15 10 10 10 10 5 5 5 5 0 0 0 0 25 20 18 16 14 12 10 8 6 4 2 no change -2 -4 -6 -8 -10 -12 -14 -16 -18 -20 -25 >20 20 18 16 14 12 10 9 8 7 6 5 4 3 2 1 no change -1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -12 -14 -16 -18 -20 <-20 Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 56 (National) responses & 47 (Dublin) responses Note: Chart based on 52 (National) responses & 40 (Dublin) responses +1 YEAR (LHS) & +3 YEARS (RHS) PRICE EXPECTATIONS (SURVEY 2013Q1): REGIONAL Chart 11: Expectations of Y-on-Y change in residential property Chart 12: Expectations of change in residential property prices 2013Q1-2014Q1 (Regional): 2013Q1 prices 2013Q1-16Q1 (Regional): 2013Q1 negative no change negative positive no change positive D D MD ME ME MD SW W SE SW BD NAT NAT SE W MW MW BD 0 20 per cent 40 60 80 100 per cent 0 20 per cent 40 60 80 100 per cent Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on a maximum of 56 responses (National) & a minimum Note: Chart based on a maximum of 52 responses (National) & a minimum of 12 responses (West) of 11 responses (West) SURVEY 2013Q1 SELECTED RESULTS (MARKET ACTIVITY) SURVEY 2013Q1: MARKET ACTIVITY Chart 13: Q-o-Q comparison of residential market sales activity per cent per cent more busy about the same Chart 14: Ranking of market participants by strength of demand per cent per cent 1 less busy 2 3 4 5 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 Sales completed Sales agreed Sales enquiries (from buyers) Sales instructions (from sellers) 0 0 20 40 60 80 Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on at least 101 responses 100 0 FTB Mover BTL/Investor Holiday Home Other Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on a maximun 86 responses (FTB) & a minimum of 37 responses (Other). 1 = strongest demand, 5 = weakest SURVEY 2013Q1: MARKET ISSUES SALES PRICES & PURCHASE METHOD Chart 15: Breakdown of sales by price buckets Chart 16: Breakdown of purchase method per cent per cent 30 per cent per cent 30 Mortgage 25 25 20 20 15 15 Non-mortgage Don't know 3% 50% 47% 10 10 5 5 0 0 Don't know >€500K €451-€500K €401-€450K €351-€400K €301-€350K €251-€300K €201-€250K €151-€200K €101-€150K €51-€100K €0-€50K Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on details of 511 units, provided by 83 individuals who Note: Chart based on details of 497 units, provided by 82 individuals who answered this question answered this question SURVEY 2013Q1: MARKET ISSUES - FAILED TRANSACTIONS & INFLUENCES ON MARKET DEMAND Chart 17: Breakdown of reasons given for failed transactions Chart 18: Current influences (positive & negative) on per cent demand in the residential property market per cent 5% Negative 3% 14% 33% Positive other forced sales of… media coverage 21% availability of suitable… 24% Credit Finance Change of mind Problems with mgt. co.,surveyor/engineer's report, property title/deeds economic outlook/sentiment taxation regime availability of value availability of credit Bank/legal delay -20 Other -15 -10 -5 0 5 10 15 20 Fears of future house price falls Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on most common reasons given for the 243 transaction failures cited per cent Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 150 responses per cent APPENDIX LOCATION AND OCCUPATION Chart 1: Respondent's location Chart 2: Respondent's occupation / business interest per cent per cent 35 35 30 30 25 25 20 20 15 15 10 10 per cent per cent Auctioneer/Estate Agent/Valuer Public Institution Financial Institution Other 1.6% 7.9% 7.9% 82.5% 5 5 0 0 DUB SE ME SW W MD BDR MW >1 region NAT Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 116 responses Note: Chart based on 126 responses MARKET FOCUS AND RESOURCES Chart 3: Breakdown of resources devoted by market sector Chart 4: Breakdown of resources devoted by market sector per cent per cent per cent Residential property Commercial property 9% Agricultural property Other per cent Sales Lettings 4% Professional services Other 3% 16% 15% 52% 29% 72% Source: Central Bank & SCSI Survey of Property Professionals Source: Central Bank & SCSI Survey of Property Professionals Note: Chart based on 109 responses Note: Chart based on 105 responses IF YOU HAVE ANY COMMENTS/QUERIES ON THESE RESULTS, OR IF YOU ARE NOT INVOLVED IN THE SURVEY AT PRESENT AND YOU WOULD LIKE TO BE IN THE FUTURE PLEASE CONTACT: GERARD KENNEDY [email protected]