Syndicated News Archives - Desmond Gibbons & Co.

WTO members warn on post-Brexit market access

World Trade Organization members have demanded compromises from the EU and Britain to ensure foreign businesses do not lose market access in post-Brexit trade.  

At a meeting of the WTO’s Goods Council, 15 countries – including the US, India, Australia and Canada – raised concern over the so-called Tariff Rate Quotas (TRQs) that will be in place after Brexit. 

Under WTO rules, nations use TRQs to set a threshold at which foreign goods can be imported at reduced tariff rates.  

Non-European nations have warned that their producers could lose access to both the British and EU markets. 

They fear that EU quotas will be soaked up British imports, while British quotas will be filled by imports from the EU.  

“We will be quickly crowded out and face a loss of access to both markets,” the US said in a statement delivered to the WTO meeting. 

New Zealand agreed that it was “hard to see” how WTO members from outside Europe “would have much realistic chance of accessing these quotas”. 

New Zealand also called on London and Brussels to create quotas “explicitly preserved for other WTO members to maintain our existing levels of access, or substantially expanded (quotas) to account for the large bilateral EU-UK trade.” 

Australia said its businesses with licenses to export agricultural products to the EU under the existing quotas system had already suffered “significant commercial disruptions” because of the uncertainty surrounding the system after Brexit. 

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Two thirds of SMEs do not have digital presence

A survey by the IE Domain Registry, which manages the dot-IE web address, h found that two thirds of SMEs do not have a digital presence.

This means that much of the ever increasing amount of money spent online is going to multinationals like Amazon and ASOS.

David Curtin, CEO of the IE Domain Registry, said that as Irish consumers demand is not being satisfied by Irish companies, they are drifting towards the likes of Amazon and Alibaba. 

He said the risk for Irish business is that those consumers will not come back and the gap will continue to widen.

The loyalty of those customers moves from the local SMEs to the international platform, he added.

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Property prices see slowest growth in six years – CSO

Dublin residential property prices fell for the third month in a row in the year to September, the latest Central Statistics Office figures show today.

Dublin residential property prices decreased by 1.3% in the year to September, with house prices falling by 1.5% and apartments slowing by 0.2%. 

The CSO noted that the highest house price growth in Dublin was in Fingal at 1.5%, while Dun Laoghaire-Rathdown saw a decline of 6.8%.

Dublin property prices had slowed for the first time since 2012 in July.

Meanwhile, residential property prices in the rest of the country rose by 3.6% in the year to September, with house prices increasing by 3.4% and apartments by 4.8%. 

According to the CSO, the region outside of Dublin that saw the largest rise in house prices was the Border with growth of 11.8%, while the smallest rise was recorded in the Mid-East at 0.2%.

Overall residential property prices increased by 1.1% nationally in the year to September – the slowest rate of growth in over six years. 

The CSO said this compares with an increase of 2% in the year to August and an increase of 8.5% the same time last year. 

Today’s CSO figures also show that households paid a median price of €255,000 for a home on the property market in the 12 months to September. 

Dublin was the county with the highest median price at €368,000. Within Dublin, Dún Laoghaire-Rathdown had the highest median price of €527,000, while Fingal had the lowest at €340,000. 

The CSO said the highest median prices outside Dublin were seen in Wicklow with prices of €323,500 and Kildare on €304,999, while the lowest price stood at €106,250 in Leitrim.

It also said that a total of 45,192 household dwelling purchases were filed with Revenue in the year to September. 

Of these, 31.4% were purchases by first-time buyer owner-occupiers, while former owner-occupiers purchased 52.7%. The remaining were bought by non-occupiers.

Revenue data shows that there were 1,325 first-time buyer purchases in September 2019, an increase of 15% on last year. 

These buys consisted of 386 new homes and 939 existing homes.

Separate figures from the CSO today show a 22% increase in the number of new dwellings built in the three months to September. 

60% of all new dwellings were completed in Dublin or the Mid East and the CSO said the Eircode with the most new dwellings was Naas. 

Meanwhile, a total of 1,538 bed spaces were completed in the student accommodation sector in the third quarter.

Residential property prices had shot up from 2013 to 2018 following a property crash just over a decade ago that meant just 4,500 homes were built in 2013 despite the fact that a sharp economic recovery had begun to take hold. 

Prices have risen at more sustainable levels this year due to mortgage lending limits, which put a lid on double digit percentage rises, and as supply started to catch up. 

“In previous cycles, we’ve had rampant house price inflation and rampant supply together whereas this time around you have sedate, stable house price inflation but you’re still seeing the supply response come,” Davy Stockbrokers chief economist Conall MacCoille said. 

“Part of that is because home building is just still at a very, very low level. We’re still building the lowest level of homes since the early 1990s when the population was 3.8 million and now it’s 4.9 million,” Conall MacCoille said. 

Data this week also showed housing starts across the country were up 33% in the last year, which Mr MacCoille said should translate into over 25,000 new homes in 2020. 

That is still below the 35,000 analysts estimate are needed every year to meet demand and Central Bank Deputy Governor Sharon Donnery warned on Wednesday that supply was not rising fast enough, noting that for every 12 new jobs created in Dublin over the past five years, just one new dwelling has been built.

While house prices are 16.9% below the unsustainable 2007 peak, rents have long overshot that mark. 

At more than 40% above the previous peak in Dublin, sky-high rents highlight the major affordability problem in the market and difficulties prospective buyers face in saving a deposit to buy a home.

With the number of homes available to rent also beginning to rise, annual rent inflation has slowed to 5.2% from 12% in mid-2018, property website Daft.ie said this week.

“It’s going to take a couple of years of supply before affordability is dealt with,” Conall MacCoille said.

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Euro zone economy continues steady growth in third quarter

The euro zone economy continued to grow at a modest pace in the third quarter as expected, data from the EU statistics office showed today, as Germany narrowly escaped a technical recession and other big economies expanded. 

Eurostat said gross domestic product in the 19 countries sharing the euro increased 0.2% quarter-on-quarter in the third quarter for a 1.2% year-on-year gain. 

The quarterly expansion was in line with a Eurostat preliminary flash estimate earlier this month and market expectations, although the previous year-on-year figure was 1.1%. 

Germany, the euro zone’s biggest economy, grew 0.1% in the third quarter after a -0.2% contraction in the previous three months, so avoiding a technical recession. 

France, the second biggest economy grew by 0.3% in the third quarter against the previous three months and the third biggest Italy expanded 0.1%. 

Spain and the Netherlands, the fourth and fifth biggest economies of the bloc, each grew by 0.4%.

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Revenue says no surcharge on returns filed this week

Revenue has said that its online system ROS is back up and running after being offline for some time today.

Revenue had earlier said in a statement that it was aware of further difficulties with the ROS system after it also experienced issues yesterday.

“Revenue acknowledges the difficulties and frustration being experienced by taxpayers and agents who are continuing to try and file returns today and apologises for the inconvenience,” it added.

“In light of the difficulties experienced with the ROS system over the last couple of days, a surcharge will not apply to any returns filed this week,” it said.

It said that applies up to midnight on Sunday 17 November.

Revenue again said it sincerely apologised for the inconvenience caused.

The head of Revenue’s Personal Division has said the problems with ROS did not arise as a result of a cyber attack.

Speaking on RTÉ’s News at One, Declan Rigney said an investigation is continuing into the potential causes of the problems.

He said the issues are “complex and extremely technical”, but he was confident they were not caused by “external factors.”

He reiterated that that no surcharge will apply to any returns filed this week.

Yesterday, Revenue had extended the deadline for taxpayers who were filing their returns for last year and paying their provisional taxes for 2019 online until 6pm today.

It said these problems were caused by heavy usage volumes on the ROS system. 

This caused intermittent downtime for some of those using the online system and while it was still possible to file returns, the volume of submissions were less than expected, it added.

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Macroeconomic Scoreboard shows just four breaches of EU thresholds – CSO

Ireland has breached EU limits on four key tests of economic stability, new figures from the Central Statistics Office show. 

The Macroeconomic Scorecard, compiled by the CSO, is part of a system introduced by the European Commission during the financial crisis to flag imbalances in member state economies. 

The number of breaches is down from the high of 10 breaches in 2010 and 2011 and the CSO said it is seeing continuing improvements.

Ireland is out of step with European limits when it comes to house price inflation, private and government debt levels and our international investment position. 

However, Ireland is way ahead of European norms when it comes to unemployment, growth in labour costs and exports. 

Irish government debt, at 63.6% of GDP, remained slightly above the EU threshold of 60% last year, while the deflated house prices indicator – which measures inflation in the housing market – recorded an 8.3% annual change, above the 6% EU threshold. 

Private sector debt, at 223% of GDP, continued to breach the EU threshold of 133%. 

But for the first time since the lead up to the economic crisis, the combined total of Irish owned debt – households and Irish non-financial corporations – was below the EU threshold.

This trend continued in 2018 with the combined total of Irish owned debt making up less than half of the total private sector debt, the CSO said.

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German economy dodges recession with 0.1% expansion in Q3

The German economy escaped a recession in the third quarter as strong consumer spending helped output grow 0.1% quarter-on-quarter, defying expectations of a contraction, preliminary data showed today. 

Gross domestic product in Europe’s largest economy expanded by 0.5% from July to September after a 0.3% expansion from April to June.

This is according to seasonally adjusted figures from the Federal Statistics Office.

Private household spending was higher than in the second quarter and the state also increased spending, the statistics office said, adding that construction also supported growth. 

“We do not have a technical recession, but the growth numbers are still too weak,” Economy Minister Peter Altmaier said. 

While exports edged up, imports remained at about the level of the previous quarter, the office said, suggesting that net trade had a positive impact on the economy. 

The Statitics Office revised down the quarterly GDP rate for the second quarter to a 0.2% quarter-on-quarter contraction from a previously reported 0.1% decline. 

Analysts polled by Reuters for the third quarter had expected a 0.1% contraction quarter-on-quarter and a 0.5% expansion year-on-year in seasonally adjusted terms.

September housing commencements up 28% on last year

The number of new homes which have commenced construction in September was 28% higher than in the same period last year.
 
Figures published by the Department of Housing show that 26,106 Commencement Notices were recorded in September.

The figure for the three Dublin local authorities was 8,714 (up 23%), while the Mid-East Region comprising counties Meath, Wicklow, Kildare and Louth was 6,594 (up 23%).

The number of Commencement Notices in the rest of the country was 10,798 (up 35%). 

Commencement Notices are issued to local authorities by builders in advance of construction getting underway. 

Other figures published today showed that 31,804 planning permissions were granted in the second quarter of 2019. This was 21% up on the same period last year. 

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Rent inflation slows to lowest level in six years

The rate of rental inflation dropped to its lowest level in six years in the third quarter of this year, the latest  report from property website Daft.ie shows.  

Daft said that the average rent across the country rose by 5.2% – the smallest increase since the second quarter of 2013. 

However the average monthly rent in the country in the third quarter of this year hit €1,403 – the 14th consecutive quarter of record rents. 

Daft said the average listed rent is now €373 per month higher than the previous peak in 2008 and almost €660 higher than the low seen in late 2011.

It noted that the increase in rents in Dublin in the year to September was 3.9%, the 33rd consecutive quarter where rents have risen but the slowest increase since the middle of 2012.  

Inflation has also slowed in Leinster, with rents 4.3% higher than a year ago, down from inflation of 10% or more between 2014 and 2018. 

Meanwhile, rents in Cork city were up 5.5% to €1,372, while they increased by 5.9% to €1,299 in Galway. Rents in Limerick grew by 5.9% to €1,219 while they rose by 5.5% to €1,007 in Waterford city. 

But elsewhere in the country, rents continued to rise at faster rates and Daft reported increases of 10.1% in Munster and 8.2% in Connacht-Ulster in the year to September.

The property website also said that the number of homes available to rent nationwide rose by 10% on the same date a year ago. 

This marks the eleventh time in twelve months that rental availability nationally has improved, though this is from record lows. 

It added that despite the increase there is just 3,500 rental homes available for the whole country. 

Ronan Lyons, economist at Trinity College Dublin and author of today’s report, said that over the last decade, Ireland’s rental market has experienced a persistent and worsening shortage. 

Mr Lyons said that only in recent months have signs emerged of any improvement in this situation, with both improved availability and lower inflation. 

“Nonetheless, rents continue to climb and from a base where they are already high compared to wages.” he said. 

“As has been the case throughout the last ten years, there is no quick-fix regulatory solution for the sector. Rather, fixing it will involve the construction of tens of thousands of new rental homes every year for the foreseeable future,” he added.

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AA research shows big jump in the cost of running a home

The annual cost of owning and maintaining a family home has risen by over €1,000 a year, with the average homeowner now spending over €17,000 on their home. 

This is according to the latest “Cost of Running a Home” analysis from AA Home Insurance.

Research from the insurance intermediary has found that the cost of running a home in Ireland this year came to €17,393.25, up from last year’s figure of €16,374.45. 

The AA’s study looks at the total cost of owning and running a house one in Ireland and it said this year’s increase follows a rise in the national average price of a second-hand home in Ireland. 

Values increased from €243,000 during the third quarter of last year to €269,000 in the third quarter of this year.

The hike in the cost of buying a home has caused a significant increase in mortgage repayment costs, the main driver behind the increase in home ownership costs.

Maintenance, repair and contingency funds is the second single most expensive bill for Irish householders and has increased by 0.7% on 2017, according to the AA. 

The group estimated that the average homeowner is likely to spend or set aside €1,264.35 each year to keep up with wear and tear.

The AA said its latest findings means that the cost of owning and maintaining a home equates to about 43.4% of the current average Irish national wage.

Conor Faughnan, AA Director of Consumer Affairs, said that while we are still significantly off the peaks seen during the Celtic Tiger, house prices have continued to surge in the past 12 months.

“In fact, the increase in monthly mortgage repayments almost single-handedly accounts for the over €1,000 increase in home running costs that we have seen this year,” Mr Faughnan said.

“The good news is that many of the other increases seen in home running costs are offset by drops in the cost of electricity and broadband/tv charges, meaning if you were fortunate enough to purchase your home when prices were lower, your financial situation is largely unchanged,” he added.

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