BPFI Housing Market Monitor - Q3/ 2019 With a commentary by Dr Ali Uğur Chief Economist, Banking & Payments Federation Ireland
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BPFI Housing Market Monitor Q3/ 2019 With a commentary by Dr Ali Uğur Chief Economist, Banking & Payments Federation Ireland
OVERVIEW OF TRENDS BPFI HOUSING MARKET MONITOR Q3/2019
Indicator Latest quarter One year ago % change
Dwelling completions 5,667 4,645 22.0%
Dwelling commencements 7,596 5,716 32.9%
Dwellings listed for sale 20,857 18,595 12.2%
Dwellings listed for rent 16,038 16,611 -3.4%
Transactions 12,366 11,869 4.2%
Yr/yr change in transaction prices 1.1% 8.5%
Yr/yr change in list prices 0.1% 6.6%
Yr/yr change in list rents 5.2% 11.3%
Mortgage approvals 13,308 12,232 8.8%
Mortgage drawdowns 11,794 10,873 8.5%
www.bpfi.ieCOMMENTARY BPFI HOUSING MARKET MONITOR Q3/2019
Increasing Drift of First-Time Buyers
to Dublin Commuter Belt
Housing supply continued its upward trend in the third quarter of first nine months of 2019 compared with 16,217 units in the same
2019, mainly driven by a significant increase in apartment building. period in 2018, a 22% increase over the period. These trends suggest
According to the most recent data from the Central Statistics Office that total commencements for 2019 should exceed 24,000 units which
(CSO), there were 5,667 new dwelling completions in the third quarter of is a positive development for overall supply in 2020 as completions in
2019 bringing the total number of new dwellings completed in the first a given year closely follows commencement numbers in the previous
three quarters of 2019 to 14,764, an increase of 18% from 2018 levels. year since the CSO revised completion numbers.
The number of apartment completions increased by around 81% in the
quarter compared with the same period in 2018, accounting for nearly Annual Trends in Mortgage Activity (Q1-Q3)
one fifth of all completions during the third quarter of 2019, the highest 50%
share since 2011 when the current CSO data series began. Dublin and
40%
Dublin Commuter accounted for around 60% of all completions during
the quarter. We estimate that total completions should be over 20,000 30%
units in 2019, assuming similar trends experienced in the past few
20%
years.
10%
A further encouraging sign of increased output in residential building
0%
activity is the strong growth in the commencement numbers, which
is a good indicator for short term supply in the market. In the second -10%
2012 2013 2014 2015 2016 2017 2018 2019
quarter of 2019, commencement numbers showed a year on year
decline, however in this commentary we argued that this was following Approvals YoY change Drawdowns YoY change
a strong growth in the first quarter and half year figures overall Dashed lines show annual trends smoothed using polynomial trendlines
showed growth. This strong growth continued in the third quarter of
2019 and almost 7,600 units were commenced during the quarter, Source: BPFI
bringing the total number of commencements to 19,856 units in the
www.bpfi.ieCOMMENTARY BPFI HOUSING MARKET MONITOR Q3/2019
Mortgage activity, in terms of drawdowns and approvals, more than rules do not allow them to purchase in Dublin, given income levels as
tripled between 2011 and 2018. As activity levels increase, it is natural well as savings. We see that for example, the share of FTB mortgage
to see a decline in growth rates as we have been observing during drawdowns for property in the Dublin Commuter belt involving buyers
2019. In addition to the base effects, we see increasing reliance of the moving county has increased to around 41% in 2019 to date, compared
total mortgage activity on FTBs who are in turn facing affordability with 8% in Dublin and 28% in the rest of Leinster. The data also suggest
challenges with increased price levels both in the purchase and rental that some 77% of FTBs moving county and buying Dublin Commuter
markets. property, and 31% moving county and buying in the rest of Leinster,
came from Dublin.
Residential property prices have recently started to stabilise and the
most recent CSO data show that, at national level, prices increased by Share of FTBs Moving County by Property Region
1.1% year-on-year to September 2019 compared with an 8.5% increase
50%
in the twelve months to September 2018. As usual, we see significant
regional differences with prices in Dublin actually declining by 1.3% 40% 39%
40% 41%
annually, whereas prices excluding Dublin increased by 3.6%. 35%
33%
30% 31%
30% 27%
28%
26%
In addition to annual residential property price changes, it is important
20%
to monitor the level of average prices. For example, average prices 16% 15%
14%
16% 16%
have now increased by around 95% in Dublin since their lowest level in 10% 7%
9% 8% 8% 8% 10%
12% 12% 12% 12%
February 2012, while prices in the rest of the country are around 84%
higher than their lowest level which was back in 2013. 0%
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
FTBs on the move Dublin Dublin Commuter Leinster Munster Connacht-Ulster
A reflection of the different average prices in Dublin compared to other Region of Property
regions has been the shift of potential home purchasers moving to Source: BPFI Loan-level data analysis
areas around Dublin, given that restrictions around macroprudential
www.bpfi.ieCOMMENTARY BPFI HOUSING MARKET MONITOR Q3/2019
Regional mobility perhaps shows the flexibility of the workforce in the
Irish economy, however it should be noted that the pattern of more
residential housing activity taking place in the Dublin Commuter belt
is likely to put pressure on the infrastructural needs in these areas,
which is likely to have a negative impact on the overall competitiveness
of the Irish economy. In addition, price developments are seriously
limiting potential buyers’ preference, particularly FTBs, to live in areas
closer to where they work or currently live, as average income levels of
this cohort of potential customers are affected by the macroprudential
framework in place for mortgage lending taking into account average
price levels, particularly in Dublin.
Dr Ali Uğur, Chief Economist,
Banking & Payments Federation Ireland
www.bpfi.ieHOUSING SUPPLY BPFI HOUSING MARKET MONITOR Q3/2019
New dwellings completed
Source: CSO
6,000
Almost 5,700 new dwellings were completed according to the
Central Statistics Office (CSO)* in Q3 2019, 22% more than in
5,500
Q3 2018.
5,000
Completions in Dublin rose by only 3.1% year-on-year while they
fell by 1.1% in Cork. While the other regions reported strong
4,500
year-on-year growth, the Dublin Commuter region accounted
for 432 of the 829 additional housing units completed. Scheme
4,000
house completions grew by 16.6% year-on-year to 3,311 and
for the second consecutive quarter, more scheme houses were
3,500
completed in the Dublin Commuter region than in Dublin.
3,000
The number of apartments completed jumped by 81.1% year-
on-year to 1,086. While Dublin still accounted for almost three
2,500
quarters of new apartments, Connacht-Ulster, Dublin Commuter
and Munster (excluding Cork) all showed strong growth – albeit
2,000
from very low bases.
1,500
*The CSO publishes quarterly data new dwelling completions.
1,000
500
Q1 Q2 Q3 Q4
www.bpfi.ieHOUSING SUPPLY BPFI HOUSING MARKET MONITOR Q3/2019
New dwellings commenced 8,000
Source: Department of Housing
There were almost 7,600 housing commencements in Q3 2019, 7,500
a jump of 32.9% on the same period of 2018. In the year to
7,000
October 2018, there were almost 19,900 commencements,
up 22% year-on-year.
6,500
The growth was driven by the Dublin Commuter region (Louth,
6,000
Meath, Kildare and Wicklow) where commencements grew by
58.3% year-on-year. The region accounted for 828 of the 1,880 5,500
increase in commencements. Dublin commencements rose by
27.1% year-on-year. 5,000
Both regions approached activity levels last seen in 2007: in the 4,500
first nine months of the year, Dublin Commuter commencements
totalled 5,161, about 87% of the 2007 level, while, at 6,474, Dublin 4,000
commencements were about 82% of their 2007 level.
3,500
3,000
2,500
2,000
1,500
1,000
500
Q1 Q2 Q3 Q4
www.bpfi.ieHOUSING SUPPLY BPFI HOUSING MARKET MONITOR Q3/2019
Properties listed for sale Source: Daft.ie
The period July-September 2019 saw just over 20,850 22,000
properties listed for sale, an increase of 12.2% compared
with the same three-month period in 2018. This is the 20,000
11th time in the last 12 quarters that the number of
properties listed for sale has grown, year on year. 18,000
All parts of the country saw an increase in the flow of 16,000
properties on to the market. In Dublin, there was a rise
of 11% in listings, year on year. Growth was also strong in 14,000
the rest of Leinster and in Connacht-Ulster (14% and 20%
12,000
respectively). Listings grew by 6% in the four other major
cities and by 8% in Munster, outside its main cities.
10,000
8,000
*The statistics are based on properties advertised on Daft.ie for a given period
and exclude any stock available for sale but not listed on the website.
6,000
4,000
2,000
Q1 Q2 Q3 Q4
www.bpfi.ieHOUSING SUPPLY BPFI HOUSING MARKET MONITOR Q3/2019
Properties listed for rent Source: Daft.ie
20,000
The third quarter of 2019 saw just over 16,000
properties listed for rent nationwide, a 3% decrease
18,000
on the same period in 2018. This was the lowest total
for the third quarter of the year since the start of
16,000
the series in 2011 and marked the 10th consecutive
quarter that rental listings had fallen, year-on-year.
14,000
The fall in listings was prevalent across a number of
12,000
regions, with 7% or 8% falls in the four major cities
outside Dublin, in Leinster (excluding Dublin) and in
10,000
Connacht-Ulster. There was a small increase (2%) in
rental listings in Munster, outside the cities, while
8,000
listings in Dublin fell marginally (by 1%).
6,000
*The statistics are based on properties advertised on Daft.ie for a given period
and exclude any stock available for rent but not listed on the website.
4,000
Q1 Q2 Q3 Q4
www.bpfi.ieHOUSING SALES & RENTALS BPFI HOUSING MARKET MONITOR Q3/2019
Transaction prices
Residential property prices increased by 1.1% year-on-year in 16%
September 2019. The national index was 16.9% lower than its highest
14%
level in 2007.
12%
Prices in Dublin fell by 1.3% year-on-year in September 2019, following
a 0.4% drop in August. This marked the fifth consecutive month in 10%
which Dublin residential property prices had fallen or increased by
no more than 0.1% year-on-year. Dublin house prices had recorded 8%
the biggest falls: according to detailed regional data available from
2010, the residential property price index peaked for houses in Dún 6%
Laoghaire-Rathdown and Dublin City in October 2018 and in South
4%
Dublin two months later.
2%
Residential property prices outside Dublin rose by 3.6% year-on-year,
with the Border region showing the fastest growth at 11.8%. Prices 0%
varied widely by region: no county in Connacht-Ulster (excluding
Galway) had a median house price above €150,000, while median -2%
prices in the Dublin Commuter (Kildare, Louth, Meath and Wicklow) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
region ranged from €210,000 in Louth to €323,500 in Wicklow. 2017 2018 2019
28%
24% National Source: CSO
20% Ex-Dublin
16% Dublin
12%
8%
4%
0%
-4%
-8% www.bpfi.ieHOUSING SALES & RENTALS BPFI HOUSING MARKET MONITOR Q3/2019
14%
Listed sale prices
The annual rate of inflation in listed sale prices 12%
nationwide was just 0.1% in the third quarter of 2019,
the lowest rate of increase seen since late 2013, when
10%
prices bottomed out. The small increase means that
Q3 2019 was the 24th consecutive quarter where list
prices had risen in year-on-year terms. 8%
In three of the five regions, however, the annual
change in prices was negative, including Dublin, where 6%
prices in the third quarter of 2019 were 0.6% lower
than a year previously, as well as Leinster outside
Dublin (-1%) and Connacht-Ulster (-0.6%). In the other 4%
cities (3.3%) and in Munster outside the cities (2.5%),
prices were still higher than a year previously.
2%
0%
-2%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019
25%
Dublin Source: Daft.ie
20% Leinster
National
15% Munster
Other cities
10%
Connacht-Ulster
5%
0% www.bpfi.ieHOUSING SALES & RENTALS BPFI HOUSING MARKET MONITOR Q3/2019
18%
Listed rental prices
The annual rate of inflation in listed rental prices in the 16%
third quarter of 2019 was 5.2%. While inflation in listed
rental prices has been positive for 29 consecutive quarters 14%
since mid-2012, the latest rate of inflation was the lowest
since the middle of 2013.
12%
Year-on-year inflation in Dublin rents was 3.9% in Q3 2019,
down from 10.9% a year previously. There was a similar
slowdown in inflation in the four other major cities (down 10%
from 16% to 5.7%) and the rest of Leinster (from 11% to
4.3%). The slowdown in rental inflation was more muted
in Connacht-Ulster (from 10.8% to 8.2%), while in Munster, 8%
outside the cities, rental inflation accelerated from 9.6% in
Q3 2018 to 10.1% in Q3 2019.
6%
4%
2%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019
25%
Dublin Source: Daft.ie
20% Leinster
National
15% Munster
Other cities
10%
Connacht-Ulster
5%
0%
www.bpfi.ie
-5%PROPERTY TRANSACTIONS BPFI HOUSING MARKET MONITOR Q3/2019
The number of residential properties sold in Ireland Source: CSO
rose by 4.2% year-on-year to almost 12,400 in Q3 2019.
The sale of new properties increased by 0.6% year-on- 4,500
year to 2,243, following two quarters of year-on-year 4,000
decline.
3,500
Sales grew fastest in the Dublin Commuter region 3,000
(Kildare, Louth, Meath and Wicklow), up 15.6% year- 2,500
on-year to more than 2,300 in Q3 2019. Sales of new
properties grew particularly strongly (up 36.9%) to 764, 2,000
only 25 units fewer than in Dublin. 1,500
1,000
The rest of Leinster continued to grow steadily,
increasing by 5.4% year-on-year to 1,376 in Q3 2019, 500
the highest level since the data series began in 2010.
Sales in the counties Cork/Galway/Limerick/Waterford
rose by 3.7% year-on-year, while the rest of Munster Dublin Cork/Galway Dublin Commuter Rest of Leinster Rest of Munster Rest of
Limerick/Waterford Connacht/Ulster
saw 5.4% growth following three weak quarters. Sales
in the rest of Connacht-Ulster fell for the second *This data is based on stamp duty filings reported by the CSO for purchases of residential properties by households at market prices.
consecutive quarter, dropping by 2.9% year-on-year. It excludes properties purchased at non-market prices and by non-household buyers.
www.bpfi.ieMORTGAGES BPFI HOUSING MARKET MONITOR Q3/2019
Mortgage approvals Source: BPFI
Mortgage approval volumes rose by 8.8% year-on-year 14,000
in Q3 2019 to more than 13,300. Purchase mortgage
approval volumes (including self-builds) grew by 11.9% 13,000
year-on-year as lending to first-time buyers (FTBs)
continued to drive the market. Non-purchase mortgages 12,000
(including re-mortgages/switching and top-ups) fell by
3.2% - the first year-on-year drop since Q3 2013. 11,000
10,000
Mortgage drawdowns 9,000
Mortgage drawdown volumes grew by 8.5% year-on-
8,000
year to almost 11,800 in Q3 2019. Purchase mortgage
drawdowns rose by 8.7% year-on-year but FTB 7,000
drawdowns increased by 14.3%. Looking at the year
to date, in the first nine months of 2019, residential 6,000
investment letting drawdown volumes fell to their
lowest levels since 2014. 5,000
4,000
3,000
2,000
1,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Approvals Drawdowns
www.bpfi.ieMORTGAGES BPFI HOUSING MARKET MONITOR Q3/2019
Customer Type
FTB Mover Purchase
Median deposits
€150K €150K
€140K €140K
The median deposit* for FTBs fell by 0.6% year-on-year
€130K €130K
in Q3 2019, with the median hovering around €37,000
since the end of 2017. The median mover-purchase €120K €120K
deposit fell for the first time since 2015, dropping by €110K €110K
2.2% year-on-year to €90,000 in Q3 2019.
€100K €100K
The median FTB deposit in Dublin fell on a year-on- €90K €90K
year basis (down 0.3%) for the third successive quarter,
Median Deposit
while median deposits for mover purchasers rose by €80K €80K
only 0.2%. €70K €70K
*The median deposit is derived from sample loan-level data provided by BPFI members. €60K €60K
The analysis is subject to regular revision as new data is made available.
€50K €50K
€40K €40K
€30K €30K
€20K €20K
€10K €10K
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
Source: RPPR
www.bpfi.ieMORTGAGES BPFI HOUSING MARKET MONITOR Q3/2019
Median incomes Customer Type
FTB Mover Purchase
€130K €130K
Median borrower incomes (the sum of all borrower
incomes) rose by 1.9% year-on-year for FTBs to €71,000 €120K €120K
and by 0.3% for mover purchasers to more than €101,000.
€110K €110K
Median FTB incomes rose in all regions. They rose to their
Median Total Annual Income
€100K €100K
highest levels since the data series began in 2012 in both
Dublin and Dublin Commuter. €90K €90K
Dublin median FTB incomes were up 3.8% year-on-year €80K €80K
to a new high of €85,000 while Dublin Commuter median €70K €70K
FTB incomes rose by 6.6% year-on-year to almost €75,000.
€60K €60K
While the median FTB income grew by €10,000 nationally
between Q3 2015 and Q3 2019, the median FTB income €50K €50K
rose by more than €14,400 in Dublin and by almost
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
€11,800 in the Dublin Commuter region over the same
period.
Source: BPFI
*Median borrower incomes are derived from sample loan-level data provided by BPFI
members. The analysis is subject to regular revision as new data is made available.
www.bpfi.ieMORTGAGES BPFI HOUSING MARKET MONITOR Q3/2019
Customer Type
FTB Mover Purchase
Median price-to-income ratios 4.4 4.4
4.2 4.2
The ratio of property purchase price to the combined
incomes of borrowers (price-to-income) is a useful 4.0 4.0
measure of affordability and complements the Central
Bank of Ireland’s loan-to-income ratio. 3.8 3.8
3.6 3.6
The median price-to-income (PtI) ratio for FTBs rose
Median Price-to-income ratio
from 3.70 to 3.71 between Q3 2018 and Q3 2019 but 3.4 3.4
has ranged between 3.7 and 3.72 since Q4 2017.
3.2 3.2
By contrast, the median PtI for mover purchasers fell
for the first time since Q2 2014, dropping from 3.57 in 3.0 3.0
Q3 2018 to 3.53 a year later. 2.8 2.8
On a regional basis, the median PtI for FTBs in Dublin 2.6 2.6
fell on a year-on-year basis for the fifth consecutive
quarter, while the median PtI for mover purchase in 2.4 2.4
Dublin dell slightly to 3.96.
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
*The median PtI ratio is derived from sample loan-level data provided by BPFI members.
The analysis is subject to regular revision as new data is made available.
Source: BPFI
www.bpfi.ieMORTGAGES BPFI HOUSING MARKET MONITOR Q3/2019
Cash sales % Cash sales %
Cash sales ratio 60% 60%
Cash sales accounted for an estimated 25.3% of sales 55% 55%
on an annualised basis in Q3 2019, down from 29.5%
a year earlier. 50% 50%
The cash sales ratio fell in all regions on a year-on- 45% 45%
year basis.
40% 40%
The cash sales ratio in Dublin was 22.5%. This was the
seventh consecutive quarter in which the cash sales
ratio had ranged between 22.6% and 23%. 35% 35%
The cash sales ratio in the Dublin Commuter region 30% 30%
fell on a year-on-year basis to 16.5%.
25% 25%
As the cash sales ratio reaches lower values, self-
builds (which are currently in the mortgage numbers 20% 20%
and cannot be excluded) are likely to have an impact,
especially in rural areas. Dublin, the counties of the 15% 15%
Dublin Commuter region and Waterford were the
only counties where single houses (mostly self-builds)
10% 10%
accounted for less than 30% of completions. 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3
Cash sales represent all non-mortgage sales. The cash sales ratio is calculated by dividing Source: BPFI/CSO
the volume of mortgage drawdowns for house purchase and self-builds by the volume of
residential property purchases by households at market prices. The data is reported on an
annualised basis. The cash sales ratio is derived from BPFI sample loan-level data and
CSO residential property data. The analysis is subject to regular revision as new data is
made available.
www.bpfi.ieABOUT THE REPORT BPFI HOUSING MARKET MONITOR Q3/2019
The information presented here is based on a range of publicly
available reports and datasets and collated with Identify Consulting
for Banking & Payments Federation of Ireland. It is intended to
bring together the range of housing and mortgage market data
available and to constructively inform on-going analysis and
assessment of the housing and mortgage market.
Figures are presented by quarter and by region, where possible.
Unless otherwise specified, quantities given for particular quarters
(and/or regions) are totals, while prices are averages for the entire
quarter. The sources used for compiling the report are as follows:
• the Department of Housing, Planning & Local Government
[dwelling commencements]
• the Central Statistics Office [new dwelling completions, number
of housing sales transactions, residential property price indices
and transactions for cash sales estimates]
• Daft.ie [number of properties listed for sale and for rent;
indices of listed sale and rental prices]
• Banking & Payments Federation of Ireland [mortgage approvals,
drawdowns, median incomes, median deposits, median
price-to-income ratios and estimated cash sales ratios]
www.bpfi.ieBanking & Payments Federation Ireland, Nassau House, Nassau Street, Dublin 2, D02Y240, Ireland. +353 1 671 53 11 info@bpfi.ie www.bpfi.ie Dublin • Brussels • Frankfurt
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