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News : Irish Last Updated: Apr 2, 2013 - 11:44 AM


Tuesday Newspaper Review - Irish Business News and International Stories - - April 02, 2013
By Finfacts Team
Apr 2, 2013 - 7:06 AM

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The Irish Independent reports that property prices in Dublin have posted an annual increase for the first time since 2007, in a huge boost to the beleaguered market.

Demand for family homes in some parts of the city is driving the revival, according to three separate reports from property websites Daft.ie, MyHome.ie and estate agent Douglas Newman Good (DNG).

Prices outside the capital are still declining overall, although at a slower pace than recently.

According to Daft.ie, asking prices in Dublin rose by 0.5pc over the past 12 months.

That is the first time since early 2007 that prices in the capital have posted an annual increase. Nationwide, prices are down 6.6pc in the past year -- a much smaller decline than the 15pc drop reported 12 months ago.

MyHome.ie records a fall of asking prices annually of 4.8pc in the capital, almost half the rate of decline nationally, though says prices in Dublin have been stable for six months.

The economist Ronan Lyons, who compiled the Daft report, said the figures showed a "two-tier" housing market forming, with prices outside Dublin beginning to trail the capital.

The small annual increase in asking prices in Dublin is not seen in other cities, where prices are down by between 9.8pc in Cork and 14.6pc in Waterford.

"In Galway, asking prices are down by 10.7pc, while in Limerick they are down by 12.9pc," Mr Lyons said.

"Outside the cities, prices were down by roughly 10pc on average, although the fall was greater in Connacht-Ulster (15pc) than in Leinster (8.5pc) or Munster (9.5pc).

"What we're seeing now is that people want homes that are near jobs, good transport links and so on.

"They are less willing to do lengthy commutes, partly because where they are living is no longer increasing in value on a daily basis.

"There are few signs that supply will increase in Dublin any time soon, so like any market when demand is outpacing supply, prices will increase."

Despite the increases in Dublin, the wider market continued to fall, albeit at a slower rate.

While asking prices don't include how much a property was ultimately sold for, such figures tend to closely reflect the final sale price.

Asking prices are also available much sooner than sale prices, which tend to be made available about six weeks after a property is sold

Mr Lyons said he believes there is a case for demolishing houses in regions where demand is low.

"It's about having supply in the right areas. There is little demand for housing in places like rural Connacht and the market is much weaker there as a result," he claimed.

Flat

The Daft report came on the same day as a report from MyHome.ie, which shows that house prices were flat in Dublin for the second quarter in a row.

It said this is the first time Dublin prices have gone six months without falling since 2006.

Overall, MyHome sees prices falling 1.8pc in the first three months of this year, compared to a 3pc dip between October and December 2012.

The report's author, Annette Hughes from DKM Economic Consultants, said there were now clear signs that the market was stabilising – in Dublin, at least.

"At 4.8pc, the annual rate of decline in Dublin is about half the national rate

"Asking prices in Dublin have been reasonably stable over the last year and this may indicate that they are now levelling off.

"Nationally, prices continued to fall, but the annual rate was under 10pc for the first time since 2008 and this is also a positive development," she said.

While both Daft and MyHome looked at the property market overall, the estate agent Douglas Newman Good looked specifically at the market for second-hand family homes – the type of dwelling that is now in the most demand.

According to DNG, such houses have increased in value by 3.3pc in Dublin so far this year and are up nearly 10pc on a year ago.

Perceived "good" areas on the southside of the city are especially in demand.

The average price of a second-hand home in Dublin is now €262,000, says DNG.

Company chief executive Keith Lowe was another to point to the development of a two-tier market between Dublin and the rest of the country.

"Dublin and some other high population urban areas, such as Galway, Cork and Sligo, are outperforming the rest of the country," he said.

"Due to its high population, infrastructure and employment Dublin is likely to continue to outperform the rest of Ireland in terms of house-price recovery," he added.

The Irish Independent also reports that the number of vacant business buildings in Ireland has soared by 6.7pc in just six months, according to the second study of its kind of commercial vacancy levels in Ireland.

A total of 25,432 premises were recorded as empty nationwide in January, compared with 23,834 empty buildings in August last year, an increase of 1,598 nationally.

Meanwhile, the average county vacancy rate (the percentage of empty buildings among the total stock measured for each county) is now 11.4pc, up from 11pc six months ago.

The latest six-monthly commercial property vacancy survey by GeoView, in association with DKM, shows Dublin, which has the most commercial buildings of any county, as having one of the most extensive increases in empty business properties, with a rise of 12pc (of total stock) in August to 13pc in January.

In all, the capital now has 6,202 empty properties compared with 5,581 in August.

Vacancies

The worst overall county vacancy rate is in Sligo, which now sees 15.1pc of its commercial properties lying empty – an increase of 1.1 percentage points on the 14pc recorded last August.

Kerry remains at the bottom of the table at 9pc alongside Meath, Westmeath and Wexford, and the county experienced one of the fastest rises in vacancies over a six-month period, up two percentage points from 7pc.

At 10pc, Cork city stood below the national county average but Galway and Limerick both matched Dublin's 13pc vacancy level, both well above the 11.4pc national average.

The survey covered the current status of 223,451 commercial properties in the country.

The Irish Times reports that trade unions opposed to the new Croke Park agreement are planning a campaign to put pressure on Labour Party TDs to vote against legislation implementing it.

The unions want Labour TDs to accept the outcome of ballots where members of individual unions vote to reject the proposed new accord.

The Government’s position is that if the deal is ratified by the public service committee of the Irish Congress of Trade Unions, it will be considered to have been accepted by all affiliated unions even if their membership had voted against it.

Under traditional congress rules, its stance is determined by a vote of affiliated unions with those with larger membership – such as Siptu and Impact – given greater weight. Traditionally all unions have abided by the decision of Ictu’s public service committee.

However, on this occasion a number of unions have argued they will not be bound by an overall public service committee decision on ratification as the current Croke Park proposals would see a reduction in members’ earnings.

A new campaign by unions to target Labour Party backbenchers to accept a No vote is expected to get under way within days.

The chairman of the Labour parliamentary party, Jack Wall, said last night that it would be premature to make any comment in advance of a decision by union members.

“At this stage it would be wrong to pre-empt the decision to be made by union members,” said Mr Wall.

He added that once the process had been concluded there would be interaction between Labour TDs and unions but he had no intention of beginning that process until decisions were made.

Legislation

Speaking on behalf of the unions for a No vote yesterday, Eoin Ronayne of the Civil Public and Services Union said they would be seeking Labour backbenchers to encourage the Government to respect any vote to reject the deal and not to railroad the proposed measures through by means of legislation.

The Government position as set out by the Minister for Public Expenditure and Reform Brendan Howlin is that all unions will ballot their members individually.

“If the agreement is accepted by a congress ballot then it is deemed by us to be accepted by all congress unions. All its measures will apply to those unions. However, unions which put themselves outside the process will have the benefits of the process removed from them,” he said

The new moves to lobby Labour backbenchers come as teachers are expected to warn the Government today of potential industrial relations strife inrooms if it seeks unilaterally to implement the cuts set out in the proposed new Croke Park deal.

The executive of the Teachers’ Union of Ireland will today table an emergency motion at its annual conference stating that it will resist with all means necessary any move by the Government to put the deal in place.

The Irish Times also reports that Lawyers for property developer Seán Dunne have filed records in the Connecticut courts halting the National Asset Management Agency’s legal action against him and his wife, Gayle Killilea, after he filed for bankruptcy in a separate court in the US.

Under US bankruptcy law, a stay is put on any litigation against individuals once they file for bankruptcy, automatically halting any legal actions against them.

It is then up to the trustee appointed by the bankruptcy court over the person’s estate to determine whether to pursue the legal proceedings.

Mr Dunne’s lawyers yesterday filed a record requesting a “motion for stay by reason of bankruptcy” in the Superior Court of Connecticut, a state court, after the Co Carlow developer filed for bankruptcy late on Good Friday in the District of Connecticut US Bankruptcy Court, a federal court.

The motion will mean that a hearing scheduled for Thursday in the Connecticut state court will not proceed. Even though Ms Killilea has not filed for bankruptcy, Nama’s case against the couple hinges on his financial affairs, which will fall under the responsibility of Mr Dunne's bankruptcy trustee.

The developer could emerge debt-free from bankruptcy within six months if his discharge from bankruptcy is not contested by any of his creditors, which includes Nama.

The State loans agency can, however, ask the trustee to pursue the same legal action that it had taken against Mr Dunne.

On Thursday a judge was due to hear Ms Killilea’s objections to an order of the court compelling her to hand over details of any properties or money transferred to her from her husband since 2008.

Nama, which is owed €185 million by Mr Dunne, sued the couple in Connecticut’s superior court last year.

It claimed that he had fraudulently transferred a half-share in an apartment in Geneva more than three years ago and that she has used his money to develop properties in Greenwich, Connecticut.

The Irish Examiner reports that investment in small businesses is the only way to solve the unemployment crisis and return the country to sustainable growth, the Small Firms Association has claimed.

Director Avine McNally said that instead of making it easier for employers to hire people, the Government has placed a levy on employment.

“Government measures taken since 2010 have already added over €660m per annum to labour costs, through employer PRSI changes, pensions levy, and, most recently, the changes to the redundancy rebate,” Ms McNally said.

“The cumulative impact of this has been a 1.4% increase in labour costs, while at the same time both employers and staff in the vast majority of small companies have taken pay cuts.”

The SFA called on the Government to make sure that hiring staff would not be a cost burden on companies by “job-proofing” all Government actions.

Ms McNally pointed to the reduction of employers’ redundancy rebate to 0% in last year’s budget as an example of bad policy.

“Every policy emanating from Government must be ‘job-proofed’ to analyse its likely impact on jobs,” she said.

“When employment costs rise, small firms are less likely to take on new staff. The small business sector is the engine of the economy and it is vital that Government does not undermine its ability to drive growth and create jobs.”

The cost of doing business is also prohibiting small businesses’ ability to take on more staff she said. “Small businesses have taken steps to regain their cost base, yet many costs remain outside their control as they are Government influenced.”

“As a result any competitiveness gains are being over-ridden by external government costs. When these costs are passed on to the rest of the economy, competitiveness and jobs are lost,” she said.

However, as most small firms focus on Ireland, it is the lack of domestic demand that has been the biggest obstacle to growth. In particular, the uncertainty facing domestic consumers has made doing business more difficult.

“The biggest challenge for small firms, especially those trading on the domestic market, is confidence among consumers,” Ms McNally said.

“In recent times it has been volatile, as many positive signs have been knocked by concerns over the eurozone and higher taxes.

“It is vital that confidence is restored to Irish households and businesses, as when they become more confident about their prospects, economic recovery will gain greater momentum, especially at the domestic economy level.”

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© Copyright 2011 by Finfacts.com

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