Increasing Drift of First-Time Buyers to Dublin Commuter Belt – BPFI Housing Market Monitor

Encouraging signs on property supply

The latest Housing Market Montior Q3 2019 published today by Banking & Payments Federation Ireland (BPFI) shows that, as average house prices continue to increase across the country but particularly in the capital, there has been an increasing drift of first time buyers moving to the Dublin commuter belt (Louth, Meath, Kildare and Wicklow). The Monitor also points to increased activity across key indicators including  housing supply and mortgage activity.

Drawing on BPFI’s unique loan-level data as well as a range of published data for its assessment of the current state of the housing market, the latest BPFI Housing Market Monitor draws attention to some key findings as follows:

  • Housing supply continued its upward trend in Q3 2019, mainly driven by a significant increase in apartment building, albeit from a low base. The number of apartment completions increased by around 81% in the quarter compared with the same period in 2018, accounting for nearly one fifth of all completions during the third quarter of 2019. This is the highest share since 2011 when the current CSO data series began.
  • Some 7,600 dwelling units were commenced in Q3 2019, bringing the total number of commencements to 19,856 units in the first nine months of 2019, up 22% on the same period last year.
  • Irish mortgage activity, in terms of drawdowns and approvals, more than tripled between 2011 and 2018. Most recently mortgage approval volumes rose by 8.8% year-on-year in Q3 2019 and mortgage drawdown volumes grew by 8.5% in the same period.
  • Reflecting higher average house prices in Dublin compared to other regions:
    • There has been an increasing drift of first-time-buyers moving to the Dublin commuter belt with 41% of first-timebuyer (FTB) mortgages on property in this area involving buyers moving county.
    • Some 77% of those FTBs moving county and buying property in the Dublin commuter belt are from Dublin while 31% of those moving county and buying in the Rest of Leinster region came from Dublin.

The Share of FTBs Moving County by Property Region graph below provides more detail.

Source: BPFI Loan-level data analysis

 

Providing his assessment of these market developments, Ali Uğur, Chief Economist, BPFI, explains that despite stabilising house prices and encouraging signs in relation to housing supply, FTBs continue to face affordability challenges which are placing serious limitations on where they can afford to buy, particularly in Dublin. This is reflected in the increasing shift of buyers  to areas outside of Dublin which is likely to negatively impact not only these regions but the wider economy in general:

“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.”

The BPFI Housing Market Monitor is available on the BPFI website here.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

The BPFI Housing Marking Monitor is published quarterly. In addition to presenting a unique range of loan-level data, the Monitor draws on a range of published data under the three key headings of housing supply, housing prices and rents, and housing transactions in its assessment of the current state of the housing market.

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie

SOLD OUT – Banking Regulation & Supervision – SOLD OUT

The BPFI Annual Risk Management & Supervisory Conference, will take place on Friday 24th January in The Marker Hotel, Grand Canal Square, Dublin 2, from 9.00am – 12.30pm.

Banking sector in Ireland and in the EU have gone through significant changes from both regulatory and supervisory perspectives in the past 10 years.

This year’s conference entitled, Banking Regulation & Supervision, will look at whether we can expect to see stability around regulatory developments in the near future as well as what banks should expect on future developments in the regulatory/supervisory agenda as priorities and how these developments may shape the banking sector in the EU.

At this conference you will hear from expert speakers from the European Commission, European Banking Authority, Single Resolution Board (SRB), among others on the latest regulatory issues including Basel III finalisation and implementation in the EU, priorities for the SSM and the SRB in 2020.

Agenda available here

Almost 1.5 million contactless payments made per day in Q3 2019

Contactless accounted for more than 40% of card payments

Consumers made almost 1.5 million contactless payments a day in Q3 2019, according to the latest contactless update from Banking & Payments Federation Ireland’s Payment Monitor. The number of contactless credit and debit card payments* grew by 44% year-on-year with nearly 135 million payments valued at more than €1.6 billion.

Source: BPFI

In volume terms, an estimated 41% of all credit and debit card payments were contactless in Q3 2019, while 11% of the value of card payments were contactless. A further 38% of the value of card payments was for ecommerce (online) transactions according to the Central Bank of Ireland, highlighting the importance of a successful implementation of the strong customer authentication requirements for online card payments under PSD2 by 31 December 2020.

Contactless payments are relatively low value, averaging €12.03 per payment in Q3 2019, compared with €40.73 for debit cards and €75.86 for credit cards.

Speaking about the continued growth in contactless payments, Brian Hayes, BPFI Chief Executive, stated:

Consumers want fast, simple and secure payments. That’s why they have adopted contactless payment so quickly. With contactless-enabled cards already in most wallets, future growth will come mainly from increased usage of contactless payments and the latest figures show that consumers are using contactless payments more and more: consumers are already making some 1.5 million contactless payments per day.

 “At the same time, more than one third of card spending was online. A successful implementation of the strong customer authentication requirements for online card payments in Europe will be crucial to ensure that online retailers and their customers.”

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

*Including mobile wallet payments such as Apple Pay or Google Pay.

BPFI’s contactless payments data is based on data collected from the five main retail banks. Data on total credit and debit card activity is sourced from the Central Bank of Ireland. The BPFI Payments Monitor provides a comprehensive picture of the various means of payment executed via the various payments systems in Ireland. The report is available on the BPFI website here [https://www.bpfi.ie/publications/bpfi-payments-monitor/].

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie