Irish Property prices rise, signaling a possible rebound for the ailing economy
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PRICES EXPECTED TO SHOW FIRST ANNUAL INCREASE SINCE HOUSING MARKET CRASHED
Irish home prices rose for the fifth consecutive month in August, again led by a strong rise in the capital, evidence that the country is beginning to emerge from the property crash that sent its economy into a tailspin and wrecked its banks.
Ireland’s government and its international bailout creditors watch home prices for signs that the economy is recovering from its banking and fiscal crisis. The banks need the property market to recover very strongly to help stem losses they suffered on their loan books after house prices collapsed more than five years ago and sent the country to the brink of bankruptcy.
The scars of the country’s long property slump remain deep. Home prices countrywide are still 49% below their 2007 peak, marking one of the largest declines recorded world-wide, and it will likely be many years before they ever again match such levels.
But the Central Statistics Office data published Thursday shows prices are at last stabilizing and starting a “slow recovery,” said David Duffy, a housing expert at the Economic and Social Research Institute, Ireland’s leading think tank. He predicts that prices will rise 5% countrywide in 2013, the first such annual rise since the crash began, led by large gains in Dublin.
Prices rose 0.9% in August, following increases of 1.2% in July, 1.2% in June, 0.3% in May and 0.8% in April, the CSO said, and were 2.8% higher than in August 2012.
In Dublin, residential prices rose by 1.9% in August, and were 10.6% higher than a year earlier, marking the largest annual increase since April 2007.
Prices outside the capital rose in August by only 0.1% on the month, showing evidence of a clear urban/rural divide, and a very uneven housing-market recovery.
“There is no doubt that lack of supply has driven Dublin house prices up,” said Alan McQuaid, chief economist at Merrion Capital.
Cash buyers are also driving price rises in the capital, which isn’t a sign of a healthy housing market because there are only so many people who can pay cash for property, analysts warn.
Simon Ensor, chairman of real-estate agency Sherry FitzGerald Residential, estimates that half of the Dublin transactions are cash deals, led by expatriate Irish investors who are returning home after doing well in the U.S. and U.K.
“But the stock of houses for sale in Dublin is less than 1%, which is well below the 3% level of transactions that would characterize a healthy market,” Mr. Ensor said.
A strong and sustained recovery in home prices will require a return to a sound market for home loans, but banking industry figures don’t yet suggest that is under way.
Many households continue to grapple with large debts and few economists expect a very strong recovery in residential prices. The Irish government is preparing to detail next month tax increases and spending cuts in its budget for 2014, which will mark the country’s sixth year of austerity.
Unemployment, though down from its peak, is at 13.4%, and emigration remains at elevated levels. Ireland’s economy expanded in the three months to June by 0.4% from the first quarter, but was still 1.2% lower than a year earlier, the CSO said last week.
Nonetheless, the evidence of rising house price rises should come as a relief to the coalition government as a sign that the wider economy is starting to recover.
In the final years of the housing boom, 2006 and 2007, prices rose 14.7% and 7.3% respectively.
When the bubble burst, Irish home prices fell by an annual 7% in 2008, and then plunged 18.8% in 2009 and 12.4% in 2010. Prices also posted double-digit declines in 2011 and 2012.
With prices for commercial property also slumping, Irish banks were left with huge losses, and required huge sums from Irish taxpayers to rescue them from collapse. Ireland eventually was forced to strike an international bailout deal in late 2010.
Nama should step in to stop a new Irish property bubble
Nama should intervene to ensure that a house price bubble does not form in the Dublin market, said Dermot O’Leary chief economist with Goodbody Stockbrokers.
After one of the steepest house price crashes among OECD countries, a new property cycle is emerging as the domestic economy recovers. He cites international comparisons which show that in a crash of this magnitude, house prices decline for six years and then grow by on average 6% each year.
“A similar occurrence in Ireland would mean that 40% of the drop in prices would be recovered within five years, leaving prices still down 30% from the peak,” said Mr O’Leary in a new study on the property market
However, it is going to be a multi-speed recovery. Dublin house prices increased by 11% over the past 12 months, whereas they are still falling in the rest of the country. He said there is a shortage of supply in Dublin, particularly in the south of the city, which means that new building is required immediately.
The latest mortgage approval figures released by the Irish Banking Federation show that 1,776 mortgages were approved in August, of which 1,637 (92%) were for house purchase. This is up 11.1% compared with Aug 2012, although it fell by 5.3% compared with the previous month. The value of mortgages approved was €297m.
Eircom recovery operations ahead of target
Eircom is ahead of schedule in terms of its long-term recovery plan, its management has claimed, despite its latest annual results showing further earnings and revenue declines.
The former State-owned telecommunications company, yesterday reported group revenues of just under €1.4bn for the 12 months to the end of last June.
This was down by €121m, or 8% on the previous financial year. Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by €55m, or 12%, to €487m. However, chief financial officer Richard Moat noted that the latter figure is €22m ahead of target and the €123m EBITDA figure for the quarter marked the second successive quarter of earnings growth.
Mr Moat added that Eircom’s recovery is an ongoing process and the last financial year, though successful, was just the first of a five-year turnaround plan. A total of 850 people left the company last year as it continues its plan to realise 2,000 job cuts by June of next year. Operating costs were reduced by €37m — to €612m — last year, and cumulative cost savings should amount to €100m by the end of next June.
“During the course of the year, we took a number of steps to stabilise our bottom line performance with continued focus on cost. This has delivered consecutive quarters of EBITDA growth. At the same time, we need to address our top line. Now that we have the network capability, we believe that we can provide compelling offers that will retain and eventually grow our customer base,” Mr Moat said.
Eircom closed out June with 2.39m customer, 3% down on the previous year, but a slowdown in customer losses. Broadband customers dipped 1% to 451,000, but Eircom expects growth in its current year.
In mobile — taking in the e-Mobile and Meteor brands — customer numbers fell by 2%, to just under 1.06m, but earnings almost doubled to €17m, with a near 70,000 increase in post-pay customers. The 83,000 extra post-pay customers represented the best performance in the market.
Mr Moat said Eircom’s ability to be first to market with new fourth generation (4G) services, this week, has been “vital”, as it shows the company can be an industry leader, in new product offering, rather than a follower.
Some people wear cancer like a badge, says comedian Jennifer Saunders
Kelly Davidson (right picture) says her tattoo ‘symbolises her transformation’ after cancer
British comedian Jennifer Saunders hits out at cancer survivors who wear the disease as a badge of honor following her own battle with the disease
The British comedian (55) was diagnosed with breast cancer in 2009 but kept her illness and treatment a secret until she was pictured at a party without her blonde wig.
The Absolutely Fabulous star received the all-clear in 2010 but said she was attacked by some former sufferers for suggesting she was “free” from the disease after she revealed her regrown hair at a party.
“People were writing, ‘How dare you say that! You’re never free of cancer!”’ she told The Times Magazine. “And I thought, ‘No, actually I am free of cancer now.”’
Asked if she believed some people keep wearing cancer like a badge, she responded: “For ever — and I’ll give you why. “Because it is the job you don’t have to work for. “You suddenly get so much attention, and if you’re not used to that, I bet it can sway you a little bit.
“I’m used to it. My job gives me the attention I would otherwise crave. They must be so pissed off when their hair grows back. And you think, ‘Oh, come on, cancer is so common now’.”
The comedian and mother of three, who received chemotherapy and radiotherapy after doctors found a number of malignant lumps, said she never worried she would die from the disease because “they told me I wasn’t going to”. Saunders, from Richmond in west London, has previously made light of her illness and joked about her ”lovely pert new bosoms” when she spoke out about it for the first time.
But her husband Ade Edmondson has described difficulties endured by those with cancer and said the ordeal should not be referred to as a ”battle”.
“It’s not a great three-part TV drama full of moments, it’s a long grind, like a slow car crash that will last five years and then, hopefully, we’ll get out,” he said.
Google turns 15 years and celebrates by smartening up their search engine
NEW FEATURES SUCH AS COMPARISONS AND FILTERS ARE PART OF GOOGLE’S ‘HUMMINGBIRD’ ADVANCED SEARCH RANKING SYSTEM
Google is now 15 years old, and the company is celebrating by smartening up its bread-and-butter technology, search, and adding new features such as comparisons and filters.
The new features are part of an advanced search ranking system that Google has been rolling out over the past several months, called “Hummingbird.” Hummingbird, a Google spokeswoman said, is designed to make users’ search results more useful and relevant, especially when they are asking the search engine long, complex questions.
Not too complex, though. The query, “What is Google planning to do for its 20th birthday,” did not produce any definitive answers.
Instead, Google used more simple queries to show how the new search tools, announcedThursday, work.
To start, Google is adding filters and comparisons to search. Both tools are designed to improve the intelligence of Knowledge Graph, Google’s developing technology to better understand search queries in their natural language, said Amit Singhal, senior VP of search.
With comparisons, users can enter queries such as “compare butter with olive oil,” or “compare Earth vs. Neptune,” and Google will display the results in a grid that makes clear the differences between the two. (While Earth has a 365-day orbital period, Neptune’s is 165 years, according to Google.)
The comparison tool does not work for all searches. A search for “compare Google vs. Facebook” did not present any such grid in its results.
The filters tool is meant to tackle questions that have multiple answers and let users dive deeper into each result. For example, users can search for “impressionist artists,” and a horizontal panel will appear at the top of the results page displaying photographs of people such as Claude Monet, Edgar Degas and Mary Cassatt, which people can click on to learn more. With the filters button, users can change their search to examine other styles of art, such as baroque or abstract.
The tool can give results for a broad range of topics. Top postmodern authors? The panel of photos starts with Don DeLillo, David Foster Wallace and William S. Boroughs. Los Angeles Dodgers pitchers? Brian Wilson, Clayton Kershaw and Ricky Nolasco.
But like comparisons, the filters tool does not work for everything. A search for “technology CEOs” yielded nothing, and neither did “James Bond villains.”
The company will also be releasing a new version of its Google Search app for the iPhone and iPad to help those devices better communicate with each other. With the update, people will be able to use one device, such as a tablet, to create a reminder of what to buy at the grocery store. Then, if the person walks into the store with a different device, such as an iPhone, a reminder will pop up.
The updated Google Search app is coming in the next couple of weeks, the company said.
Finally, the company is applying some cosmetic changes to search on mobile phones and tablets, to take out some of the clutter and present the search results on cards, “so you can focus on the answers you’re looking for,” Google said.
The search upgrades were presented Thursday by Google’s Singhal, not on the Google campus but at a house in nearby Menlo Park, California — Google’s original “headquarters.”
Bob Geldof among stars starts training for his space journey
Bob Geldof said: ‘Elvis may have left the building, but Geldof has left the planet’
SXC intends to fly space tourists to the edge of space from the island of Curacao in the Caribbean.
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