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The Irish property market is being hit increasingly hard by Brexit, with estate agents all over the country reporting an average fall-off in demand by one-third from across the water.

UK-based buyers – largely returning Irish emigrants who left here in the 1980s or after the recent economic crash – had been making up to one-in-five sales in some counties, particularly those on the Border and in popular tourist areas. Most have properties to sell in Britain and have lost purchasing power thanks to the difference in sterling.

But at the same time, overall overseas enquiries for Irish properties are up, according to the Real Estate Alliance (REA), which estimates that close to one-in-five Irish property sales (18pc) nationally is currently made to someone who is based abroad.

REA, which represents more than 50 property firms nationally, estimates that property enquiries from the UK have fallen by 32pc compared with the same period last year. “Our agents report that enquiries from the UK have dipped by a third since the Brexit vote, and the attendant fall in the value of sterling against the euro,” it said.

The Brexit impact is being felt most in Border counties with holiday homes. Agent Michael McElhinney of Bundoran said that sterling buyers previously accounted for half of all properties sold. “The exchange rate drop has resulted in reduced enquiries by about 30pc and equivalent sales,” he said. “Brexit has had a negative effect on the market and brought in uncertainty.”

Despite the fall-off, UK ­buyers still account for 37pc of all overseas-based sales here.

Meanwhile 19.6pc are now coming from the US, 18pc from Australia, 15pc from mainland Europe and 11pc from other locations – especially Canada.

“A total of 78pc of our members report an increase in enquiries from overseas overall in the last year, with the average agent seeing a 22pc rise in calls from outside Ireland,” McElhinney said.

In contrast to the fall in British-based buyers, the Trump factor and a strong dollar is boosting enquiries for Irish properties from parties based in the USA.

Almost one-in-five of overseas enquiries about Irish property is now coming from the United States, from almost nothing two years ago, according to the Real Estate Alliance nationwide survey.

Eamonn Spratt, chairman of the Real Estate Alliance, said: “Property buyers from the US are increasingly securing homes and investment properties in Ireland, buoyed by a strong dollar and the lure of a resurgent economy for emigrants.”

The surge in demand from American-based parties has spurred the REA to organise an exhibition of Irish property for sale in Boston which will take place at the Lenox Hotel on March 23.

“The average house price in the US in November 2016 was $365,200 (€341,739), compared to our Average House Price survey national value of $216,856 (€202,926), so there is obvious value for American buyers in Ireland,” said Mr Spratt.

“But the biggest increase in calls came from Irish emigrants planning to return from Australia, a tally which increased from 11pc of overseas based enquiries in 2015 to 18pc in 2016.

“The resurgent economy is having a positive effect on the market with the number of overseas buyers enquiring about moving to live and work in Ireland rising by 9pc over the past year.”

Exactly 40pc of sales to overseas purchasers are for properties valued above €200,000 – a rise of 9pc on the 2015 figure.

The biggest change in the market has been the drop of 25pc in sales of properties below €100,000, said Mr Spratt.

“This reflects the decline in stocks of excess housing for under six figures in rural counties.”

Article Source: http://tinyurl.com/kbwqb42

There is no evidence that banks are not passing on interest rates cuts, the ECB has claimed in a research paper.

The ECB has slashed rates to 0pc in an attempt to stimulate lending, but Irish banks are still charging mortgage borrowers here in excess of 3pc.

However the report, which looks at the euro area as a whole, claims the market is functioning – with lower interest rates being passed through the banking system to borrowers.

“So far, there is no evidence that monetary policy transmission in the euro area is being significantly affected by this type of non-linearity (banks delaying passing on interest cuts),” according to an economic bulletin published by the ECB in Frankfurt yesterday.

That finding is likely to raise eyebrows here, where the persistently high cost of credit has prompted policymakers to table legislation to give the Central Bank powers to cap mortgage interest rates which is likely to be enacted by the summer.

That bill looks set to pass despite opposition from both the Central Bank, which says it doesn’t want new powers, and the Minister for Finance Michael Noonan.

The minister has said competition is the best way to bring down prices.

Variable mortgage interest rates here are around double those charged in the rest of the eurozone.

It means a typical Irish borrower pays €200 a month more than a homeowner in Germany or France on a €300,000 mortgage.

Fixed-term debt is a smaller part of the Irish market relative to other markets, but remains expensive by comparison.

Tracker mortgages give borrowers a legal right to interest rates tied to the official ECB rate.

They are by far the cheapest mortgages in Ireland, but have not been offered to new borrowers since the crash.
In its research, the ECB does not cite Irish borrowing costs, focusing mainly on the situation in four big eurozone economies – Germany, France, Italy and Spain.

The ECB found that, after a period of wide divergence during the crash, retail lending rates have declined across the Euro area since 2014.

The bank linked that trend to so called non-standard measures introduced to encourage more, and cheaper, lending – including slashing official interest rates to an historic low of zero.

The EU’s new common banking rules, including a single supervisor for large lenders and common standards, had also reduced fragmentation across the member states.

Where big gaps do exist between borrowing costs country to country, the Bank said it can be a reflection of more local factors – including cyclical issues within economies and structural factors.

The key determinate of price divergence between countries is banks’ own borrowing costs, the report said.

Retail interest rates reflect the cost to each bank of cash raised through the bond markets and savings, regardless of official interest rate action.

Big differences between headline borrowing costs from one country to another can also reflect factors such as higher fees in one market compared to the other, which are not captured by a direct comparison of interest rates, the report said, without citing specific evidence or cases.

Differences in “collateral and contractual options” can also explain price differences, the report said.

In the Irish case, that would include the relatively slow and borrower-friendly repossession processes in cases of default, and the high level of impaired loans held by banks, though again, the report does not cite such examples.

Borrowing rates can also diverge between countries as a result of the share of fixed versus variable rate loans issued by lenders.

Although in the Irish case, even where fixed rates are available, the pricing is multiple of those charged by banks in the rest of the eurozone, and also tend to be for shorter period.

The legislation now going through in Ireland, which would allow the Central Bank to set a cap on how much banks can charge mortgage customers, most likely with reference to official ECB rates and comparison with other markets, is opposed by the ECB.

Ahead of the legislation being debated ECB president Mario Draghi claimed the bill would damage the credibility of the Central Bank and the ECB.

Mr Draghi claimed new lenders would be less likely to enter this market if there is a mortgage rate cap in place.

Article Source: http://tinyurl.com/kbwqb42

There is no evidence that banks are not passing on interest rates cuts, the ECB has claimed in a research paper.

The ECB has slashed rates to 0pc in an attempt to stimulate lending, but Irish banks are still charging mortgage borrowers here in excess of 3pc.

However the report, which looks at the euro area as a whole, claims the market is functioning – with lower interest rates being passed through the banking system to borrowers.

“So far, there is no evidence that monetary policy transmission in the euro area is being significantly affected by this type of non-linearity (banks delaying passing on interest cuts),” according to an economic bulletin published by the ECB in Frankfurt yesterday.

That finding is likely to raise eyebrows here, where the persistently high cost of credit has prompted policymakers to table legislation to give the Central Bank powers to cap mortgage interest rates which is likely to be enacted by the summer.

That bill looks set to pass despite opposition from both the Central Bank, which says it doesn’t want new powers, and the Minister for Finance Michael Noonan.

The minister has said competition is the best way to bring down prices.

Variable mortgage interest rates here are around double those charged in the rest of the eurozone.

It means a typical Irish borrower pays €200 a month more than a homeowner in Germany or France on a €300,000 mortgage.

Fixed-term debt is a smaller part of the Irish market relative to other markets, but remains expensive by comparison.

Tracker mortgages give borrowers a legal right to interest rates tied to the official ECB rate.

They are by far the cheapest mortgages in Ireland, but have not been offered to new borrowers since the crash.
In its research, the ECB does not cite Irish borrowing costs, focusing mainly on the situation in four big eurozone economies – Germany, France, Italy and Spain.

The ECB found that, after a period of wide divergence during the crash, retail lending rates have declined across the Euro area since 2014.

The bank linked that trend to so called non-standard measures introduced to encourage more, and cheaper, lending – including slashing official interest rates to an historic low of zero.

The EU’s new common banking rules, including a single supervisor for large lenders and common standards, had also reduced fragmentation across the member states.

Where big gaps do exist between borrowing costs country to country, the Bank said it can be a reflection of more local factors – including cyclical issues within economies and structural factors.

The key determinate of price divergence between countries is banks’ own borrowing costs, the report said.

Retail interest rates reflect the cost to each bank of cash raised through the bond markets and savings, regardless of official interest rate action.

Big differences between headline borrowing costs from one country to another can also reflect factors such as higher fees in one market compared to the other, which are not captured by a direct comparison of interest rates, the report said, without citing specific evidence or cases.

Differences in “collateral and contractual options” can also explain price differences, the report said.

In the Irish case, that would include the relatively slow and borrower-friendly repossession processes in cases of default, and the high level of impaired loans held by banks, though again, the report does not cite such examples.

Borrowing rates can also diverge between countries as a result of the share of fixed versus variable rate loans issued by lenders.

Although in the Irish case, even where fixed rates are available, the pricing is multiple of those charged by banks in the rest of the eurozone, and also tend to be for shorter period.

The legislation now going through in Ireland, which would allow the Central Bank to set a cap on how much banks can charge mortgage customers, most likely with reference to official ECB rates and comparison with other markets, is opposed by the ECB.

Ahead of the legislation being debated ECB president Mario Draghi claimed the bill would damage the credibility of the Central Bank and the ECB.

Mr Draghi claimed new lenders would be less likely to enter this market if there is a mortgage rate cap in place.

Article Source: http://tinyurl.com/kbwqb42

Two major Asian banks are in “advanced talks” with the State to move part of their London operations to Ireland in the wake of Brexit.

It is understood that Japan’s Sumitomo Mitsui Banking Corporation (SMBC) and the Bank of China (BOC) have both held a series of pre-application meetings with the Central Bank ahead of a potential move to Ireland.

The banks are part of a cohort of up more than 10 City of London based Asian and American banks that are in talks with the State about relocating here.

They include smaller Chinese and Japanese investment banks and asset management firms seeking to maintain access to Europe’s single market.

The talks are being progressed as Ireland secures the first wave of jobs following last June’s shock decision by the British electorate to leave the European Union.

Last week Northern Ireland pharma, Almac, announced that it was creating up to 100 new jobs in Dundalk, Co Louth.

British bank Barclays is also reported to be adding about 150 staff to its existing 100 strong Dublin cohort if UK based finance companies lose easy access to the single market.

SMBC already has a strong presence in Ireland having acquired SMBC Aviation Capital (formerly RBS Aviation Capital) six years ago.

SMBC led a consortium which acquired the Dublin aircraft lessor, one of the world’s largest aircraft leasing companies.

BOC also has an aviation presence in Ireland, wholly owning an aircraft leasing firm in the capital

SMBC did not comment. Efforts to reach BOC for comment were unsuccessful.

The Government, which recently applied for membership of the Asian Infrastructure Investment Bank (AIIB) is hoping to secure an Asian windfall in the wake of Brexit.

Earlier this month, a Goernment delegation travelled to Hong Kong and Beijing to promote Ireland’s international financial services sector.

“The unique selling point for Dublin to Asia is that Ireland will soon be the only English speaking, common law jurisdiction within the EU,” said Martin Murray, executive director of trade group Asia Matters.

“It is important to communicate that Ireland is pro-Asia and pro-business and that the Central Bank of Ireland welcomes Asian financial institutions of substance. Ireland has robust financial regulation similar to that of the UK.”

Article Source: http://tinyurl.com/kbwqb42

All eyes will be on Dublin today as British Prime Minister Theresa May travels to Dublin to hold a summit with Taoiseach Enda Kenny about the UK’s exit from the European Union.

The Brexit meeting comes ahead of the British government triggering the formal Article 50 exit mechanism at the end of March.

Tomorrow, European Competition Commissioner Margrethe Vestager, who has staunchly defended her findings that Ireland granted billions of euro in illegal State aid to Apple, will address the Oireachtas Finance Committee.

Greencore Group plc will also hold its AGM.

Following a tumultuous first week in office by US President Donald Trump, the US Federal Reserve’s latest rate decision will be announced on Wednesday.

While there is little chance that interest rates will be increased, markets will be monitoring tone and looking for any warnings that a tax cuts agenda could trigger a faster pace of rate increases.

On Thursday, the Bank of England will announce its latest monetary policy, a significant meeting as the bank publishes its latest inflation report.

Article Source: http://tinyurl.com/kbwqb42

Two-in-five workers expect a pay increase over the coming year, with less than 40pc of firms planning on increasing basic pay in the same period, according to the latest Economic Pulse from Bank of Ireland.

External factors, including the prospect of a hard Brexit and a potential protectionist policy agenda by US President Donald Trump, may also be tempering the growth ambitions of Irish firms, with two-in-three planning to expand in the next one to three years, down from three-in-four last January.

The index, which combines the results of both consumer and business pulses, was up 0.7 on December but 6.9 below last January’s reading.

Although business confidence was broadly unchanged since last December, BoI Group chief economist Loretta O’Sullivan said that the recent focus on public sector pay demands could have a knock-on effect on the private sector.

“Pay is also relevant for private sector firms, as it impacts competitiveness and is a factor within their control,” said Dr O’Sullivan, who also said the number of firms expecting business activity to increase in the near-term remains greater than those expecting a decrease.

“Other factors such as adverse exchange rate movements are not. Against the backdrop of a very uncertain external environment, an eye to the cost base and a focus on non-price factors impacting competitiveness will be important in the period ahead.”

Conducted by Ipsos MRBI, more than 2,000 businesses and 1,000 households were surveyed.

It found that many households are beginning to shake off the January blues with one-in-four saying they are likely to buy a car over the coming year.

Dublin continues to lead the way with house price expectations, with more than half (56pc) believing now is a good time to sell and almost six out of 10 stating that now is a good time to buy.

Buoyed on increased rental prices, Government policy changes such as the help-to-buy scheme for first-time buyers as well as the loosening of loan to value restrictions for FTBs, two-in-three think it is cheaper to buy than rent in their area.

One-in-four plans to spend a large sum of money on home improvements or renovations in the next 12 months.

“Three-in-four survey respondents think house prices will rise over the coming 12 months, with one-in-three expecting increases in excess of 5pc,” said Dr O’Sullivan.

“Pressures in the market are also leading to higher rents and when they compare the typical monthly rent with the typical monthly mortgage repayment for a similar property, many people are finding that it is cheaper to buy in their area than it is to rent.”

Article Source: http://tinyurl.com/kbwqb42

Companies that sell tickets for concerts and other live events are facing a probe from the State’s competition watchdog.

It is understood that the investigation involves the main providers of tickets for live events, venues and concert promoters.

The Competition and Consumer Protection Commission said it had launched an investigation into suspected breaches of competition law in relation to the provision of tickets and the operation of ticketing services for live events.

The move comes after Ticketmaster was heavily criticised earlier this month when ticket sales it was handling for an upcoming U2 concert in Croke Park sold out in minutes.

Concert goers were annoyed when the tickets soon appeared on its sister site Seatwave for multiples of the original price.

In some cases, sellers have asked for up to €1,000 for a ticket.

The commission on the re-sale of tickets on some sites can be up 20pc, the Dáil was told recently.

The competition probe will “focus primarily on potentially anti-competitive conduct by operators, including those involved in providing tickets and ticketing services, promoters and venues,” the Competition and Consumer Protection Commission said in a statement.

It wants to hear from anyone in the sector with information they feel is relevant.

Ticketmaster said it has no comment to make on the Commission’s announcement.

Live Nation, the entertainment conglomerate which controls Ticketmaster and Seatwave, did not comment. Live Nation UK and Ireland is headed by promoter Denis Desmond, of MCD Promotions.

Aiken Promotions did not respond when asked to comment.

Last week, Fine Gael backbencher Noel Rock said he was preparing a bill to clamp down on mass ticket re-selling.

He wants to change the rules on ticket sales, saying there was technology to prevent such large-scale re-selling.

Article Source: http://tinyurl.com/kbwqb42

The roll-out of the new Central Bank rules on mortgage lending mean big changes this month for first time buyers across Ireland.

Are you thinking of buying your first home? Saving a lump sum for a mortgage can be the biggest barrier but the easing of these rules means that your deposit as a first time buyer has now been cut to 10%. The market has been stimulated with the aim of more buyers entering the market in 2017.

The Central Statistics Office has reported that the first-time buyers owner-occupiers share of the market fell from 53.1% in 2010 to just 24.4% of the market in 2015, but there’s now a chance to get on the property ladder faster, as the ceiling on the loan-to-value (LTV) ratio for all first-time buyers is now set at 90%.
Renters will become Homeowners

It’s expected that more people will move in to the property market in 2017 and that more renters will now become homeowners, easing the burdens on the rental sector.

So what does this mean for you in terms of hard cash? If you’re a first time buyer looking at a house worth €400,000, you’ll now need a deposit of €40,000. Previously this would have been a €58,000 deposit.

There’s also the ‘Help-to-Buy’ scheme which was introduced by the Government in the most recent budget which offers a rebate of income tax of 5% of the purchase value of a new-build, up to a value of €400,000. This scheme is set to run until 2019 and translates to a maximum €20,000 cash rebate.

Minister for Finance, Michael Noonan has stressed that the measure will result in increasing the supply of new housing across Ireland. “In all markets, supply increases to meet demand. The Help-to-Buy scheme will increase the demand for newly built houses by assisting first-time buyers to put a deposit together,” he said.
Thinking of making the leap?

If you’re thinking of making the leap into home ownership in 2017, there’s also now a chance of the much-needed opportunity to have access to cash at this crucial time, EBS offers 2% back in cash on new mortgages.

This offer, which gives 2% of the value of the mortgage back in cash, is not just open to first time buyers, it’s also available if you’re moving or switching a mortgage loan to EBS.

So how do you get the home that you really want? Supply of properties still remains tight, so it is important to be armed with the right information. Here are 5 steps to get there:

1. Is it the right time for you?

The first consideration when buying a new property is to consider if buying a home makes financial sense. New homes are costing, on average, €43,000 more than a year ago, so you’ll need to weigh up the benefits. All lenders will look for proof that you have the earnings and the discipline to repay the mortgage. Showing a lender your record of paying rent and savings will demonstrate that you can afford to pay for a mortgage and you’ll have the ability to pass the ‘stress test’ even if interest rates go up.

2. Do your Budget and Background

One of the most important considerations before embarking on buying a new home is to do a household budget and work out how much you have coming in versus what you spend every month. It’s essential to be realistic about this.

Make sure that you are not either overestimating or underestimating your income and outgoings, to ensure that you will be able to comfortably make payments. Check out some of the affordability calculators online to give you an idea of how much you can realistically borrow. You’ll need at least 6 months bank and credit card statements, proof of identity and your loan record and credit rating will be checked with the Irish Credit Bureau.

You’ll also need proof of income if you’re a PAYE worker with a P60 and three consecutive months’ pay-slips. If you’re self-employed, you’ll need confirmation that your tax affairs are in order.

3. Have you a handle on the costs?

When buying a new home, you will need to factor in cash to fund additional costs such as valuation fees for a report on your house which will be given to your lender; legal fees for your solicitor; surveyor fees to look over the house before you buy; funds for repairs, decoration and furnishings and storage and moving fees. Stamp Duty is likely to also be the biggest consideration. It’s unadvisable to get in to a bidding war, but rather to set your budget and what you feel the new home is really worth and most importantly what you can realistically afford. Don’t stretch too far as you can always buy a starter home now and trade up later.

4. Work out your Wish List

Finding the right home takes time and it’s a good idea to get Approval in Principle before starting house hunting to get a sense of how much you can borrrow. Then it’s time to get working on your wishlist and decide whether you want a house or apartment, a new-build or something older and write down the list of important features and checklist in the order of what you want from your new property.

5. House-Hunting

When you’re house hunting and have narrowed down your search, make sure to view your chosen property at different times of day and check out the differences between weekdays and weekends.

Find out what is included in the sale, for example if you’re buying a house or apartment, check if there is a Property Management Company involved and their service fees and check in to parking spaces. Bargain to get the very best deal that you can. Drive and walk around the area and get to know the facilities, shops, pubs, restaurants, schools and parks.

Try to future-proof your decision by looking in to planning applications and what the local authority are potentially planning for the area. An independent, qualified structural surveyor is essential to have on board to assess your chosen property, so that you don’t encounter the unexpected later.

The market is moving again and 2017 is set to be a year that will see the impact of these many new initiatives.

Article Source: http://tinyurl.com/kbwqb42

Investing in advertising will generate a 500pc return for businesses, according to a new report.

For every €1 spent on advertising, businesses can expect to recoup gross sales of €8.26 and a net return of €5.44, according to the “Marketing Multiplied” report, published today by Core Media and the Association of Advertisers in Ireland.

Creative campaigns have six times the impact of less-creative campaigns, and emotionally-charged ads resonate more with audiences, according to the research.

It found that recruitment of new customers was more profitable than trying to drive increased sales among existing customers.

Brands that use paid media normally grow three times faster than those that do not, the research found, noting that larger brands have an inherent advantage over smaller ones.

The report adds that marketers should target 60pc of their budget on brand-building that focuses on creating a long-term, emotional reach.

The report – which was authored by economists Chris John and Jim Power along with Core Media ceo Alan Cox – examined the impact of marketing campaigns both from a micro and macroeconomic standpoint.

Despite the significant upsides from targeted marketing campaigns, the report finds that boardrooms “are still not convinced” of the benefits marketing and advertising can have in driving the growth of business.

Of the S&P1500 index of leading US companies just 2.6pc have a board member with managerial-level marketing experience, the report said.

“The absence of marketers from boards cannot be good for companies. It means that a critical part of the business is not being given sufficient voice or respect and it goes a long way to explain why marketing budgets are thought of an expense rather than an investment,” said Patrick Coveney, non-executive chairman of Core Media and chief executive of Greencore Group .

Advertising contributes €643bn a year to the European economy, accounting for 4.6pc of total gross domestic product on the continent. Over six million jobs are supported by the industry in the EU.

Article Source: http://tinyurl.com/kbwqb42

There is a lot of talk about the hoped-for inflow of financial services firms related to Brexit. But there will be a flow of outward investment, too. Some Irish-owned firms selling to the UK market will establish plants in Britain, or buy existing operations there. This is one obvious safeguard to the risk of customs checks and tariffs for those selling into the UK market.

On Wednesday Ornua, formerly the Irish Dairy Board, announced that it was buying a cheese plant in the UK market, FJ Need in Cheshire, with an annual turnover of €50 million. Ornua already has operations employing some 950 in the UK – and is also expanding in other markets, notably Germany and the US, meaning its move is not purely Brexit-related.

But in its statement announcing the acquisition, the company noted that the move “will also strengthen Ornua’s UK business’s capabilities in the post-Brexit environment”. Decoded from business-speak, this means it will be able to serve UK customers from a UK plant, if needed.
High tariff barriers
This is likely to be a trend, presuming – as seems likely – that the hard-Brexit narrative keeps going. For food companies, in particular, facing potentially high tariff barriers if the UK and EU cannot agree a deal and WTO tariffs come into force, UK acquisitions may make sense. It will vary from business to business: some will choose to concentrate on non-UK markets, such as France, while others will bet that they will still be able to serve UK markets from the Republic. But it would be a surprise if the UK industrial agencies were not already sounding out firms from the Republic. This would include Invest NI in the North, which could see opportunity in luring smaller businesses that might want a UK base but might not be ready to cross the Irish Sea.
New trading deal
There are a few unknowns here. The most obvious one is what trading arrangements will apply between the UK and the EU in the long term. A vital issue also is what happens in the interim period between Britain leaving the EU and a new trading deal coming in to force, which may involve a gap of four years or more.

Britain takes some 40 per cent of Irish food exports and many companies will not want to take the risk of access being hindered to a key market.

Article Source: http://tinyurl.com/kbwqb42