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Ireland’s Emerging Property Needs

Ireland’s Emerging Property Needs. Marian Finnegan Chief Economist Sherry FitzGerald Group PII Seminar, June 28, 2012. Ireland’s Emerging Property Needs………. Residential Market Demand and Supply Price Performance Commercial Market Occupier trends – Regional Office Market

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Ireland’s Emerging Property Needs

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  1. Ireland’s Emerging Property Needs Marian Finnegan Chief Economist Sherry FitzGerald Group PII Seminar, June 28, 2012

  2. Ireland’s Emerging Property Needs………. • Residential Market • Demand and Supply • Price Performance • Commercial Market • Occupier trends – Regional Office Market • Irish Retail Market • Concluding comments

  3. Demand and Supply

  4. Demand: Ireland’s Population Population: 4.58 million in 2011, 8.2% growth on 2006

  5. Demographic Profile • 0-14 Years: 979,590 21% • 15-24 Years: 580,250 13% • 25-49 Years: 1,755,325 38% • 50-64 Years: 737,694 16% • 65 Years plus: 535,39312% • Total 4,588,252 100%

  6. Demographic Profile - Dependency Levels Ireland Germany • 0-14 Years: 21% 13% • 15-24 Years: 13% • 25-49 Years: 38% • 50-64 Years: 16% • 65 Years plus: 12% 21%

  7. How we live today 2011:

  8. How we live in 2011 compared to 2006:

  9. Current Demand - An analysis of Purchasers An analysis of Completed Sales in H1 2012 • Owner Occupation 81% • Investment 11% • Additional Residence 6% • Development/other 2% • First Time Buyers 29% An analysis of Sales Agreed in Dublin in H1 2012 • 40% of purchasers bought with 100% CASH

  10. Future Demand, Demographic Projections Source: Sherry FitzGerald Research

  11. Future Demand, Demographic Projections Source: Sherry FitzGerald Research

  12. Supply Analysis

  13. Housing Completions 1970-2011 LT average: 34,441 units

  14. Second Hand Supply as a % of Total Private Housing Stock

  15. New Supply as a % of Total Private Housing Stock

  16. Total Supply as a % of Private Housing Stock

  17. Stock for Sale compared to vacancy levels Census 2012 • 1.64 million Occupied Households • 11,000 Properties Occupied by Visitors • 45,000 Residents Temporarily Absent • 168,000 Vacant Houses • 62,000 Vacant Apartments • 59,000 Holiday Homes • 230,000 Vacant Dwelling – excluding holiday homes

  18. Stock for Sale compared to vacancy levels What might they be: • 27,000: 50% of houses for sale are vacant • 18,600 complete and vacant new homes • 36,000 Private buy to let properties vacant • 14,000 Local Authority Properties vacant • 95,000 Explained Vacancy • 135,000 Unexplained Vacant Dwelling

  19. Price Performance

  20. Dublin Second-hand Market • 66.7% Sherry FitzGerald Barometer of House Prices

  21. Dublin Second-hand Market Sherry FitzGerald Barometer of House Prices

  22. Dublin Second-hand Market Sherry FitzGerald Barometer of House Prices

  23. Ireland Second-hand Market -63.1% Sherry FitzGerald Barometer of House Prices

  24. Ireland Second-hand Market Sherry FitzGerald Barometer of House Prices

  25. Ireland Second-hand Market Sherry FitzGerald Barometer of House Prices

  26. CSO v Sherry FitzGerald – Dublin Index

  27. What does all this mean for residential property? It’s the Economy……………. Established Market - Property Prices will fall during 2012 on macro basis - peak to trough in order of : 65%+ Notable latent demand in Economy, confidence and lending remain a challenge 26 County Market – each location will perform differently in years ahead, Dublin likely to outperform all other locations First to recover: Family homes – Potential for price inflation Medium term: 2012-2021: Requirement for 30,000 PA

  28. Commercial Markets Occupier Trends

  29. Sq M. % Dublin Office Market 1990 – 2011

  30. Dublin Office Market, Q2 2012* * Preliminary data

  31. Total Office Availability in CBD by Grade Q2 2012* * Preliminary data

  32. Analysis of A1 Supply* * Preliminary data

  33. Regional Commercial Office Markets, Q2 2012

  34. Ireland - GLA Density by County - 2012

  35. Distribution of Shopping Centres in Ireland

  36. Concluding Comments • Emerging signs of stability in niche markets • Stability emerging in Dublin housing market, and eastern corridor • Other regional centres to follow, Cork and Galway • Constrained supply of Grade A offices in Dublin CBD • Secondary and suburban markets remain under pressure into medium term • Galway market stabilising, Cork to follow • Need for regeneration of existing shopping centre space, potential for a second European standard shopping centre.

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