Dublin Houses rise as the rest of the country watch

In the year to December, Irish residential property prices at a national level, increased by 6.4%.  This compares with an increase of 5.6% in November and a decrease of 4.5% recorded in the twelve months to December  2012. .

Residential property prices grew by 0.3% in the month of December.  This compares with an increase of 0.6% recorded in November and a decrease of 0.5% recorded in December of last year. 

In Dublin residential property prices grew by 0.3% in December and were 15.7% higher than a year ago. Dublin house prices grew by 0.1% in the month and were 15.3% higher compared to a year earlier. Dublin apartment prices were 20.8% higher when compared with the same month of 2012.   However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.

The price of residential properties in the Rest of Ireland (i.e. excluding Dublin) rose by 0.1% in December compared with no change in December of last year.  Prices were 0.4% lower than in December 2012. 

Overall Decline

House prices in Dublin are 47.4% lower than at their highest level in early 2007. Apartments in Dublin are 54.5% lower than they were in February 2007. Residential property prices in Dublin are 49.1% lower than at their highest level in February 2007.  The fall in the price of residential properties in the Rest of Ireland is somewhat lower at 46.8%. Overall, the national index is 46.4% lower than its highest level in 2007. 

BOJ let the cash flow in a bid to finally stamp out deflation

The Bank of Japan refrained from boosting unprecedented easing as accelerating inflation marks progress in its bid to stamp out 15 years of deflation in Asia’s second-biggest economy.

Haruhiko Kuroda
黒田　東彦
Governor of the Bank of Japan

Gov. Haruhiko Kuroda’s board stuck to its pledge to expand the monetary base by an annual ¥60 trillion to ¥70 trillion on Wednesday after a two-day meeting in Tokyo.

 The BOJ maintained its forecast that core consumer prices will rise 1.9 percent in the year starting April 2015, excluding the effect of sales-tax increases, and scrapped a reference to the economy facing “uncertainty.”

With the BOJ’s preferred inflation gauge at more than half of its target 2 percent pace, analysts from HSBC Holdings Plc. to Daiwa Securities Co. have pushed back forecasts for when the central bank may add to easing. Kuroda’s policy makers may wait to assess trends in wages and the effects of the sales-tax increase in April before deciding on any extra stimulus.

Fed's taps are still going off but interest rates remain near zero

Janet Yellen incoming Chairperson of the Federal Reserve

Top Fed officials believe their decision last month to reduce the pace of the U.S. central bank’s bond-buying stimulus was well received by financial markets. That, in turn, allows them to make another $10 billion cut to the bank’s monthly bond purchases at the January 28-29 meeting without needing to adjust their promise to keep interest rates low in the future.

As the promise stands, the Fed has said it expects to keep rates near zero until well past the time unemployment falls below 6.5 percent, especially if inflation remains low. Joblessness dropped faster than expected last year and hit 6.7 percent in December, down from 7.0 percent the previous month.

Had the drop in unemployment sparked a sell off in bonds, the Fed might have reinforced its commitment to stimulus by tampering with its low-rates promise. But investors appear to have interpreted the data as a one-off event that would not prompt a quicker-than-expected policy tightening.

Report tells Ireland what it knows and that they are cheaper now too

Ireland was the only country in the EU to experience a decrease in inflation between 2008 and 2012 but prices remain high by EU standards, according to the report Measuring Ireland’s Progress 2012 , published by the CSO today. 

Ireland was the fifth most expensive EU state in 2012. However, this represents a considerable improvement on 2008 when Irish prices were the second highest in the EU, at 30% above the EU average.

1st	Luxembourg
2nd	Finland
3rd	Sweden,
4th	Denmark
5th	Ireland

The public balance deficit was the third highest of any EU member state at just over 8% of GDP, 

Government debt increased to 117.4% of GDP, having been at only 44.2% of GDP in 2008. 

The number of new houses and apartments, after peaking at almost 90,000 in 2006, collapsed to 8,488 in 2012, below the level in 1970.

 Ireland’s employment rate was the fifth lowest in the EU, and its unemployment rate was the fifth highest in the EU.

People think the houses will rise but have they the money to buy them?

 A new index from AIB/ESRI is a measure of consumer perceptions in relation to the Irish housing market as well as their house price expectations.

The survey of over 800 consumers was conducted by the ESRI between July and December 2013.

A significant shift in consumer expectations in relation to house prices from July to December 2013. Those consumers surveyed who believe house prices will be higher in 12 months’ time increased from 29.2% to 46.3%

The main reasons for not buying noted by consumers surveyed included that they are ‘satisfied with their present dwelling’ (54.6%), followed by ‘cannot afford it’ (22%)The main risks to buying noted in December by consumers was ‘worries about future income’ or ‘affordability concerns’ (58.4%), followed by ‘fears about increasing interest rates’ (17.7%). Also cited were ‘changes in family circumstances’ (16.3%), as was ‘possible changes in house prices’ (6.5%)

Overall, consumers expect that house prices will increase by 2.1% over the next 12 months. Dublin-based consumers expect higher house price growth, with growth of 3.6% expected over the next 12 months.

Dollar rises as Fed turns off the taps,but lukewarm reaction from Wall Street

The dollar rose after economic data kept alive expectations that the Federal Reserve will continue to cut back its stimulus.

The Federal Reserve 

 However  on Wall Street, Intel and General Electric were among the biggest decliners. Shares of Intel Corp lost 4.7 percent to $25.29, weighing on all three major U.S. indexes after its fourth-quarter earnings missed expectations by a penny and the company gave a lukewarm forecast for revenue for the current quarter.

 General Electric Co lost 2.8 percent to $26.44. The conglomerate posted a slightly better-than-expected rise in quarterly revenue, propelled by its oil pumps and jet engines businesses, but its full-year profit margins were disappointing.