Download PRICE EXPECTATIONS - Society of Chartered Surveyors Ireland

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]