House prices down 3.3% so far this year, rents up 0.2% – Daft.ie

House sale prices fell by an average of 3.3% in the year to June, according to the latest Daft.ie Housing Market Report. 

Daft.ie’s new monthly report looks at the health of both the sale and rental markets, with figures showing a 0.2% rise in rents nationwide in the year to June this year.

The report reveals that the average listed sale price nationwide last month stood at €253,868, while the average monthly listed rent was €1,402. 

Average Dublin house prices stood at €369,000 in June, while the average Dublin rent reached €2,023, Daft.ie said.

Most parts of the country showed similar trends, with an annual fall in sale prices ranging from 2.9% in Leinster to 4.9% in Munster. House prices sales fell by 3.8% in Dublin.

However, sale prices were up by a modest 0.7% on average in Connacht and Ulster, Daft.ie said. 

Rents were also fairly stable in the year to June, rising by 0.5% year-on-year in Dublin while they rose by 1.2% in the rest of Leinster.

But rents in Connacht and Ulster are down 2% year-on-year, Daft.ie added.

Today’s report also noted that the number of properties posted for sale or to rent during June showed a sharp recovery in market activity in June, compared to April and May. 

There were over 5,200 properties listed for sale in June, compared to roughly 2,000 in both April and May. 

Daft.ie said that while those two months had seen activity collapse by three quarters, the number of homes advertised in June was just 15% lower than in the same month in 2019. 

In the rental segment, there were 38% more homes advertised to rent in June 2020 than a year previously, with Dublin driving this trend.

Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said that market activity rebounded strongly in June, perhaps reflecting an element of pent-up demand carried over from April and May due to the Covid-19 outbreak.

“This is particularly the case for sales, where over 5,200 homes were listed for sale during the month, compared to roughly 2,000 in both April and May. Nonetheless, the figure remains below the total for June 2019,” he noted. 

He noted that significantly more homes were listed for rent in June this year than last, adding that the concern remains that policymakers see this as the underlying problem solved. 

“While the new government may want to favour the construction of owner-occupied homes, the fundamental shortages are in the social and market rental segments and it is those segments that must be the focus for policymakers over the coming years,” he stressed.

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Dramatic rise in online scams during pandemic

Fraudulent emails and text messages tricking people to share personal and banking details increased during the Covid-19 crisis, according to gardaí.

They have also issued a warning to ‘staycationers’ who are being targeted by cyber criminals on fake and cloned websites purporting to sell holiday equipment. 

The bogus websites advertise caravans, campervans and small pleasure boat sales in a bid to defraud people. 

These websites ask potential purchasers to send a deposit in advance of a sale but the purchaser never receives what they have paid for. 

Detective Chief Superintendent Patrick Lordan of the Garda National Economic Crime Bureau  said: “The criminal gangs behind these scams are very organised. 

“At the moment we are seeing quite a substantial amount of people looking to buy a new camper van, a new caravan, or a new small pleasure boat. Obviously, a lot of people plan to holiday in Ireland this year. 

“We have seen websites set up – bogus websites, cloned websites – and the criminal gangs behind them are asking people to send them a deposit for a new campervan, or new boat, and lo and behold they never see the product and the money is gone.” 

Speaking on RTÉ’s Morning Ireland, Det Chief Supt Lordan urged people to be vigilant and stressed online payments should never be made to an unknown person or entity. 

He said that people can be a “little careless” when it comes to buying products online. 

“For some reason when people are online they trust the computer in front of them and they shouldn’t do that. Stop and think before you pay the money over,” he said. 

Fraudulent emails and text messages seeking to access people’s personal and banking details increased during the Covid-19 pandemic. 

An Post and DPD – Ireland’s largest courier companies – have both issued warnings about fake emails and text messages where their branding is used.

These emails and text messages look for people’s personal details or an additional payment for a failed parcel delivery. 

DPD, Chief Information Officer Colin Kennedy said: “Since Covid there has been a tremendous increase in online shopping. With that growth we have also witnessed and increase in fraudulent activity and we have advised consumers to engage with the gardai where they have seen this happening.” 

Anna McHugh, An Post’s Head of Communications, said some fraudsters “have become quite adept and sophisticated in replicating the brands of reputable companies.” 

She said An Post uses a brand protection service to monitor the company’s brand online. If fake emails and SMS are detected, they are eradicated. 

“When we come across any of these scam emails or texts we immediately take them down,” she added. 

The Revenue Commissioners has been targeted many times too and it regularly issues advisories reminding people not to respond to these scams. 

Spokesperson Leeann O’Kelly said the fraudulent emails and text messages often offer a refund of tax or request a payment for tax owing. 

She said these are “random contacts from fraudsters who are trying to trick people in to providing personal information.

“It is really important that we issue these reminders and let taxpayers know that we never send emails or even text messages requiring the provision of personal information whether that be a link or a pop up window or a reply email.” 

Det Chief Supt Lordan said banks are also impacted and gardaí have noted a “dramatic increase in this type of activity especially since the start of the Covid-19 pandemic”. 

He said people should be aware that “no delivery company, no financial institution, or revenue or anybody else – or An Garda Síochána – will ask for your bank details or your pin numbers to be supplied either by text or by email. They will not ask for those details”. 

One sophisticated scam detected by gardaí involved people who sent their banking cards and pin numbers to a scam artist who contacted them by SMS. 

“We had a scam a couple of weeks ago where very effective text messages were going to everybody – both bank customers and non-bank customers,” Det Supt Lordan said. 

“Some of the bank customers fell for the scam. That scammer text people saying their card had been compromised at a store or online. It asked them to cut up their bank card and post it to an address. The person was also asked to text their pin number. 

“It looked really professional and quite a substantial amount of people did cut up their cards and send them to the address. 

“This meant the criminal was in possession of the person’s pin number, the security number on the back of their card and the card itself which they could be put back together. 

“We were proactive with the banks involved and carried out searches of the addresses where people were asked to send their cards. It seems to have almost wiped it out,” he said. 

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Irish economy to shrink by 8.5% in 2020 before 2021 recovery

The European Commission has said that Ireland’s GDP is projected to contract by 8.5% in 2020.

The economy here is then expected to grow by 6.25% in 2021, on the back of the pent-up domestic demand release and the global post-crisis recovery. 

This compares with the Commission’s earlier forecast of a downturn of 7.9% for this year and a recovery of 6.1% for next year. 

In its latest Summer economic outlook, the Commission said that economic activity here is expected to have plunged in the second quarter of the year due to the Covid-19 pandemic and its associated lockdown. 

It noted that private consumption is set to be particularly hit, since the quarantine measures here were “long and wide ranging”. 

On the production side, the Commission said that some economic activities resumed earlier than initially envisaged, limiting somewhat the domestic economic fallout. 

Official unemployment remained low at about 5.3% in the second quarter of 2020.

Covid-adjusted unemployment figures, which include people who are receiving unemployment payments after losing their job because of the pandemic, surged to 28.2% in April, before declining to 26.6% in May and 22.5% in June. 

It said that fiscal stimulus released in the second quarter to support households and businesses is expected to have dampened the decline in real GDP.

Fiscal policy is set to remain supportive in the second half of the year, the Commission said.

“However, the spread of the global pandemic, which caused a marked decline in exports in April, has also weakened the prospects of exports for the second half of the year,” the Commission added.

The Commission also said that the country’s economic outlook remains affected by specific uncertainty around Brexit, potential changes in the international taxation environment and the activities of multinationals registered here.  

Today’s forecast from Europe is slightly more optimistic than that of the Government. At the end of April the Department of Finance’s Stability Programme Update predicted a fall in real GDP of 10.5% this year, with a recovery of 6% next year.

The European Commission also said that the euro zone economy will drop deeper into recession this year and rebound less strongly in 2021 than previously thought.

France, Italy and Spain are struggling the most due to the COVID-19 pandemic, it noted.  

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Euro zone set for deeper recession, weaker rebound

The euro zone economy will drop deeper into recession this year and rebound less strongly in 2021 than previously thought, the European Commission forecast today, with France, Italy and Spain struggling the most due to the Covid-19 pandemic.  

The EU executive said the 19 nation single currency area would contract by a record 8.7% this year before rising by 6.1% in 2021.

In early May, the Commission had forecast a downturn this year of 7.7% and a rebound in 2021 of 6.3%. 

The Commission said it had to revise its previous forecasts because the lifting of Covid-19 lockdown measures in euro zone countries was proceeding less swiftly than it had initially predicted. 

The EU executive significantly cut its earlier forecasts for France, Italy and Spain, three of the countries hardest hit by the pandemic, and now expects now downturns in excess of 10% this year in each nation. 

Conversely, for the euro zone’s largest economy, Germany, where widespread testing has helped limit fatalities, the 2020 downturn would be 6.3%, less pronounced than May forecast of 6.5%. 

The rebound in Germany in 2021 is however expected to be less pronounced than previously estimated. 

The new figures indicate an economic recovery gathering momentum in June, although it is based on a number of “critical” assumptions. 

The forecasts assume no second wave of infections triggering renewed restrictions, although social distancing measures would persist, while monetary and fiscal policy measures are expected to support the recovery. 

The main risks include a potential wave of new infections, more permanent scars from the crisis, including unemployment and corporate insolvencies, and the absence of a EU-UK future relationship deal. 

“At the global level, the still rising rate of infections, particularly in the US and emerging markets, has deteriorated the global outlook and is expected to act as a drag on the European economy,” the report said. 

The Commission said its inflation forecasts were little changed, at 0.3% this year and 1.1% in 2021.

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Irish economy to fall 8.5% in 2020 before 2021 recovery

The European Commission has said that Ireland’s GDP is projected to contract by 8.5% in 2020.

The economy here is then expected to grow by 6.25% in 2021, on the back of the pent-up domestic demand release and the global post-crisis recovery. 

In its latest economic outlook, the Commission said that economic activity here is expected to have plunged in the second quarter of the year due to the Covid-19 pandemic and its associated lockdown. 

It noted that private consumption is set to be particularly hit, since the quarantine measures here were “long and wide ranging”. 

On the production side, the Commission said that some economic activities resumed earlier than initially envisaged, limiting somewhat the domestic economic fallout. 

Official unemployment remained low at about 5.3% in the second quarter of 2020.

Covid-adjusted unemployment figures, which include people who are receiving unemployment payments after losing their job because of the pandemic, surged to 28.2% in April, before declining to 26.6% in May and 22.5% in June. 

It said that fiscal stimulus released in the second quarter to support households and businesses is expected to have dampened the decline in real GDP.

Fiscal policy is set to remain supportive in the second half of the year, the Commission said. 

“However, the spread of the global pandemic, which caused a marked decline in exports in April, has also weakened the prospects of exports for the second half of the year,” the Commission added.

The Commission also said that the country’s economic outlook remains affected by specific uncertainty around Brexit, potential changes in the international taxation environment and the activities of multinationals registered here.  

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Euro zone retail sales in record rebound in May as lockdowns eased

Consumers in the euro zone returned en masse to shops in May as lockdowns were eased, estimates from the EU statistics agency showed today, signalling a sharp recovery of sales after record drops in March and April. 

Sales in the 19 countries sharing the euro zone rose by 17.8% in May from April, Eurostat said, in the steepest increase since euro zone records for retail sales began in 1999. 

The rise was higher than market expectations of a 15% rise on the month. 

But compared to a year earlier, sales were still down 5.1% in May, showing the recovery is far from complete. 

But the year-on-year drop was less steep than the 7.5% fall forecast by economists polled by Reuters. 

The month-on-month rise in May partly offset the record falls posted in the previous two months, with the volume of retail trade dropping by a record 12.1% in April and by 10.6% in March, Eurostat’s revised data showed today. 

The agency had previously estimated a 11.7% month-on-month fall in April.

Sales of clothes and footwear, the sector most hit by reduced trade during the pandemic, posted a 147% increase in May from April, although they were still down 50.5% year-on-year. 

Shoppers also increased by 38.4% their purchases of fuel for cars. Trade of electrical goods and furniture shot up by 37.9%. Books and computer equipment posted a 26.8% rise in sales. 

Online sales kept growing by 7% in May. They were the only retail sub-sector in the euro zone that did not suffer any drop in trade during lockdowns. 

Among the largest euro zone countries, retail sales went up by 13.9% in Germany and by 25.6% in France. May data for Italy were not available.

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Numbers on Pandemic Unemployment Payment fall as economy picks up pace

The number of people receiving the Covid-19 Pandemic Unemployment Payment has fallen from 439,000 last week to 412,900.

This marks a decline of 26,100 over the last seven days, according to the latest figures from the Department of Employment Affairs and Social Protection.

However, 63,000 PUP recipients have closed their claims in the last seven days – the largest such figure since the crisis began.

When a time lag for closing claims is factored in, this signals that the PUP figures are set to fall even further over the coming weeks. 

44,800 of this week’s recipients will receive their last payment tomorrow as they are returning to work.  

However as new “two-tier” rules take effect, over 110,400 PUP claimants who were earning less than €200 a week gross before the €350 a week PUP was introduced on March 16 will tomorrow see their weekly welfare payment fall to €203.

This is equivalent to Jobseekers Benefit.  

The Department stressed that while these recipients will lose €147 a week, they will still be receiving more than their pre-Covid earnings – and that all claimants who earned more than €200 remain eligible for the full €350 PUP support. 

In addition to those still claiming the PUP as of the end of June, a further 220,900 people are on the Live Register.

This means that 633,700 people remain totally dependent on the state for income support.  

A further 410,000 workers are having their incomes subsidised by the state under the Temporary Wage Subsidy Scheme.  

When all three categories are combined, 1,043,700 people remain fully or partly dependent on the state for income support. 

The Minister for Social Protection, Community and Rural Development and the Islands Heather Humphreys said that while the PUP continues to provide financial support to almost 413,000 out of work due to the coronavirus, today’s figures indicate that the re-opening of the economy is “picking up pace”. 

She described the fact that 63,000 people had closed their claims in the last week alone as “very encouraging”, noting that with Phase 3 of the Re-Opening Ireland Roadmap underway, an increasing number of businesses are now beginning to start back again.  

“In the last week we have seen the highest number of people return to work in a single week since the crisis commenced,” she said. 

“The Government has set employment recovery as its top priority and my Department and I will work hard to help everybody who lost their jobs due to Covid-19 take advantage of the jobs stimulus package to be announced later in the month and to get back into work without delay,” the Minister said. 

The top three sectors in which employees are returning to their workplaces are Accommodation and Food Services, “Other Sectors” (including hairdressers and barbers), Wholesale and Retail Trade/Repair of MOtor Vehicles and Construction.  

The largest age cohort getting back to work are aged 35-44. 

Today’s Department’s latest figures also reveal that to date, 52,000 people aged up to 66 have been medically certified to receive the Covid-19 Enhanced Illness Benefit of €350 per week. 

Of those just over 7% (3,709) had actually contracted the virus, while the remaining 93% (48,244) were acting on medical advice to not attend work on a precautionary basis.  

Since the beginning of June, 104 people were medically certified as having the virus, while a further 946 were medically certified to self-isolate on a precautionary basis. 

893 people are currently receiving a Covid-19 related Illness Benefit payment. 

The sectors with the highest number of employees certified to receive the Enhanced Illness Benefit are Human Health/Social Work (11,700), Wholesale and Retail Trade (11,000), and Manufacturing (7,000).

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62% of credit unions offer payment holidays amid Covid-19 crisis

62% of credit unions have introduced payment holidays as a result of the Covid-19 crisis, a new survey of credit union CEOs and managers across the country shows.

The survey also found that the three most in-demand services for credit unions have been the rescheduling of loans, the provision of bespoke services to cocooning members and express lodgements. 

It noted that Connacht had the highest incidence of loan rescheduling requests.  

The Covid-19 lockdown required credit unions to adapt quickly to changing member demands. 

Increased remote customer engagement, unsurprisingly, has been a strong feature of Covid-19 services provided by credit unions to members over recent months. 

Today’s survey noted that of the services provided by credit unions during Covid-19, online and telephone banking, at 72% and 59% respectively, had the greatest levels of engagement by members.

The biggest challenges facing credit unions themselves during the months ahead included a lack of borrowing appetite amongst members, operating costs including regulatory levies and a decline in income leading to viability issues for credit unions. 

80% of those surveyed believe that rescheduling loan repayments is the measure that can most assist credit union members in the period ahead, followed by community supports (46%) and back-to-business loans (43%). 

There was also strong support for working capital loans for members in Munster and Connacht – 51% and 48% respectively. 

The research was undertaken on behalf of the Irish League of Credit Unions (ILCU) by i-Reach. 

ILCU President Gerry Thompson said the survey provides a welcome snapshot into the work and demands on credit unions, from the perspective of those to the fore in delivering financial services to its members during Covid-19. 

“Credit unions throughout the pandemic have strived to ensure continuity of service for the 3.1 million members who use credit union services across the Republic of Ireland. This has included keeping our offices open throughout lockdown; expanding online and remote services and providing tailored financial services to those cocooning at home,” Mr Thompson said. 

He said that each individual credit union is working with its members and actively encouraging them to engage with their local credit unions to work through any financial difficulties at this unprecedented time. 

“From the perspective of the long term viability of credit unions themselves, it is equally clear that Covid-19 and its effects such as a lower appetite for borrowing or the reserving requirements which must be met by credit unions will present challenges in the months ahead,” the ILCU President said.

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NTMA to auction three different bonds this week

The National Treasury Management Agency said today it plans to raise between €1-1.5 billion through the sale of seven, ten and 30-year debt on Thursday. 

The NTMA has raised €18.5 billion from bond issuance so far this year from a €20-24 billion funding range.

Its target was increased earlier this year to shore up government finances after the coronavirus pandemic.

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consumer behavior square

Consumer behavior instability since the onset of COVID-19

According to economic data analyzed by the Bank of Ireland, the COVID-19 pandemic has significantly affected consumer buying decisions. The government’s response to the coronavirus through forced restrictions saw the closure of many industries. This negatively impacted consumer outlook and disposable income, leading to a fall in spending. However, there’s been a noticeable positive change in consumer spending since the regulations were lifted around June.

Business and consumer sentiment sink in April
Around April, the Bank of Ireland released its Economic Pulse, which indicated that both business and consumer sentiment was very low. The former expected a drop in economic activity as the government imposed restrictions in the country. Consumers, on the other hand, expressed uncertainty about the future and as a result, felt that it was wise to cut down on spending.

Additionally, the Consumer Pulse showed that as incomes were falling, consumers reduced their expenditure on goods. In the same vein, the Household Pulse indicated that consumers were unwilling to buy or sell houses as the economic outlook seemed negative. Click here to find out more: https://www.waterfordaccountants.ie/business-and-consumer-sentiment-sink-in-april/https://www.waterfordaccountants.ie/consumer-sentiment-suffers-largest-ever-monthly-drop/

Grocery sales up by 17% amid coronavirus
However, amid the Coronavirus in May, there were positive changes in household consumption. Consumers increased their expenditure on confectionery items. Overall, grocery sales went up significantly leading to a rise in monthly expenditure. Also, online shopping rose by 10% as the number of retail visitors dwindled.

During this period, vulnerable groups also increased their home deliveries of essential items. But, the total expenditure of non-food items fell, resulting in low sales for retailers. The fall in the number of retail visitors also worsened the situation.

Despite a fall in retail sales nationally, some retailers experienced an increase in market share as their sales were going up, for example, Lidl, became the fastest-growing retailer followed by Aldi. Click here:
https://www.waterfordaccountants.ie/grocery-sales-up-by-17-amid-coronavirus-crisis/Footfall in Dublin city rose to 160 000 today
The recent economic data examined by the Bank of Ireland in June shows that people visiting retail shops are steadily picking up. Footfall in Dublin City saw 160 000 visitors as the lockdown restrictions were being relaxed. However, the gradual uptake in the number of visitors hasn’t brought in positive sales as the business activity remains low. Click here: https://www.waterfordaccountants.ie/footfall-in-dublin-city-rose-to-160000-today/
Over 50% drop in trade after first Covid-19 restrictions lifted                                                           According to the Chamber Ireland, companies are experiencing low revenues because consumers are still uncertain about the economic outlook and are afraid to contract the disease outside. So, there’s consumer reluctance to spend as much as before the onset of COVID-19. And industries such as tourism, hospitality, retail, and education are the worst hit by the pandemic. Click here to find out more:
https://www.waterfordaccountants.ie/over-50-drop-in-trade-after-first-covid-19-restrictions-lifted/
Consumer spending has been unstable since the start of COVID-19. Although some retailers recorded meaningful sales amid the pandemic, nationally, retail sales were down compared to the same period last year. When the government eased the restriction, the number of retail visitors went up quite significantly. However, consumers are still reeling under the financial strain of the coronavirus and as a result, their spending is extremely low. Therefore, businesses haven’t yet shown any meaningful recovery in terms of sales. Click here to read more about retail statistics.