Sunday 17 November 2019

House prices and Central Bank cap on agenda as CSO releases figures

Another glimpse into the housing market will be provided on Thursday when we get the latest data on planning permissions
Another glimpse into the housing market will be provided on Thursday when we get the latest data on planning permissions

Thomas Molloy

The Banking Inquiry holds its media module this week. Quite what the editors and financial heads of the nation's newspapers will be able to tell the TDs and senators remains to be seen, but it may be a challenge for the politicians to leave past slurs behind them and focus on the issues at hand.

Thursday sees appearances from this parish, 'The Irish Times' and RTE, while the fun and games kick off on Wednesday with an appearance from the 'Examiner'. A press release last week explained helpfully that the inquiry will "consider the role in mainstream media for scepticism about the sustainability of the housing boom or the strength of the broader economy; potential conflicts of interest among media organisations; the promotion of property ownership over other forms of tenure; and the prevailing view that there would be a soft landing."


While the appearance of so many former editors and heads of news and current affairs will cause lots of chatter in some circles, the economy, and specifically the consumer, will be back in focus in the days ahead.

In the next few days we will see the release of residential property prices, retail sales and private-sector credit for February.

Merrion Stockbrokers economist Alan McQuaid says house prices and retail sales are forecast to be lower in the month while the credit data are again likely to be weak in underlying terms.

Residential property prices rose by 15.5pc in January, the 20th annual increase in a row but down from the year-on-year rise of 16.3pc posted in December.

This surge obscures the fact that prices were down 1.4pc in the month; the largest fall in national prices observed in a single month since February 2012. January usually sees house price declines, which is why it is often a good time to buy.

So prices will probably fall but the big question will be whether this fall is just the usual January decline or the beginning of a slide in house prices thanks to the tighter lending restrictions imposed by the Central Bank.

Mr McQuaid is not sure. "A lack of supply of houses has clearly pushed up prices, particularly in the Dublin area in the past couple of years, but it is not something that can be rectified overnight," he wrote last week. "However, the latest planning permissions data showed a sharp rise in the third quarter, indicating that things may be starting to improve on this front, which should help to reduce the increase in house prices over time.

"The new lending restrictions imposed by the Central Bank are also likely to weigh negatively on buyers and help to push down house price growth in 2015.

"Still, the generally improving economic backdrop should sustain the house price recovery in the short-term even with credit restrictions. And it should be remembered that these figures are based on mortgage draw-downs only, and don't take into account cash transactions."

Another glimpse into the housing market will be provided on Thursday when we get the latest data on planning permissions.

In the third quarter of 2014, planning permissions were granted for 2,144 dwelling units, compared to 1,409 for the same period in 2013. Planning permissions were granted for 1,783 houses in the third quarter as against 1,252 in the third quarter of 2013, a rise of 42pc.

On Thursday, we will hopefully learn how many people, and how many developers, have gone to the trouble and expense of applying for permission.

A shift away from applications for one-off housing and towards estates may signal the long-awaited return to developers.

The week ahead


Central Bank publishes paper on trends in business credit and deposits.

Datalex results for year ended December 31, 2014.


Banking inquiry hears from newspaper editors.

ESRI publishes quarterly assessment of the economy.

CSO publishes residential property prices.


CSO releases overseas travel data.


CSO releases retail sales and private sector credit figures

Irish Independent

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