Results: Circulated September 2013 Central Bank of Ireland/Society of Chartered Surveyors Ireland: Survey of Property Professionals 2013Q2 Results: Circulated September 2013

PLEASE NOTE: THE RESULTS/FINDINGS OF THE SURVEY OF PROPERTY PROFESSIONALS 2013Q2 ARE PRESENTED WITHIN. THE PURPOSE OF THIS PRESENTATION IS TO PROVIDE INFORMATION TO THOSE WHO PARTICPATED IN THE survey, CENTRAL BANK OF IRELAND STAFF & THE SCSI. we ask that this document not be publicly Quoted or circulated further.

SURVEY HIGHLIGHTS Price expectations Market activity Market issues almost half of respondents expect prices to be higher in a year’s time significant majority of respondents continue to anticipate price increases over the 3 year horizon as in previous surveys expectation is that price growth in Dublin will be much stronger than at the national level in the coming year / 3 years Regional outlook is much more optimistic over 3 year time-frame than a year from now Market activity c.60 per cent of respondents indicated that they were busier in 2013Q2 than the previous quarter in terms of sales agreed, enquiries from potential purchasers and sales instructions from vendors Of the 2013Q2 unit-sales which respondents provided details of, movers accounted for 40% Market issues the feeling that there is value to be had at present, improved sentiment towards the market and the economy are cited as positive influences on demand. Credit restrictions, oversupply and uncertainty surrounding the impact of a potential increase in repossessions are seen as the key negatives. significant numbers of transactions continue to fall through at a late stage in the process, problems with documentation such as title deeds, surveyors or engineers reports or with the management company being listed as a common obstacle

SELECTED RESULTS (PRICE EXPECTATIONS) SURVEY 2013Q2 SELECTED RESULTS (PRICE EXPECTATIONS) In this section a selection of results from the survey’s questions on property price expectations are presented. The initial slides deal with the outlook for the national market, while a more regional dimension follows. The corresponding findings of the 2013Q1 survey are included for comparison. Charts on the left of the slide present the most up to date views of respondents (i.e. those taken in 2013Q2), while the charts on the right are the views expressed in the previous survey carried out in 2013Q1. Respondents were asked to indicate whether they expected residential property prices to “increase”, “decrease” or “remain the same” over 4 different time horizons – current quarter, next quarter, next year and in 3 years time. The charts include a horizontal bar at the top which details the cumulative percentage of respondents who believe prices will fall (red), remain unchanged (orange) or rise (green). They were also asked the extent (if any) to which they believed prices would change. The range of these replies appears horizontally on the chart, (lower axis) while the percentage of respondents who opted for a particular figure can be read vertically. Please note, that in general, the response rate to the price expectations questions was lower this quarter compared to last quarter.

SURVEY 2013Q2 vs. SURVEY 2013Q1: CURRENT QUARTER PRICE EXPECTATIONS The first slide presents the expectations of residential property price growth over the quarter in which the survey was administered (i.e. 2013Q2 & 2013Q1). It is important to remember that respondents answered before they knew the official figure for the particular quarter. The actual change in the CSO’s residential property price index for the relevant quarter and the quarter before are indicated by the stars on the graph.

SURVEY 2013Q2 vs. SURVEY 2013Q1: +1 QUARTER PRICE EXPECTATIONS Charts 3 & 4 set out expectations from the respective surveys for the quarter ahead (i.e. 2013Q2 for survey carried out in 2013Q41and 2013Q2 for survey carried out in 2013Q2.)

SURVEY 2013Q2 vs. SURVEY 2013Q1: +1 YEAR PRICE EXPECTATIONS

REASONS PROVIDED FOR SHORTER-TERM PRICE EXPECTATIONS negatives: lack of mortgage finance, economic uncertainty, impact of the budget / further austerity measures, unemployment, oversupply and high emigration in some regions, feeling that outcome to the arrears problem will see an increase in repossessions resulting in further falls  may be exacerbated by widespread repossessions, vendors unrealistic on asking prices positives: recent signs of tentative increases in price & activity fostering a belief that the bottom of the market has been reached, signs credit conditions improving, while still fragile a feeling that economic sentiment has risen, progress in terms of reducing unemployment lack of supply in certain areas pushing prices up and a number of respondents noted the particular pick-up in Dublin Respondents were asked about the factors which coloured their price expectations, laid out in the previous slides. A flavour of the reasons why individuals believe prices will fall or rise over the next year, (negatives & positives respectively) are provided here.

SURVEY 2013Q2 vs. SURVEY 2013Q1: +3 YEARS PRICE EXPECTATIONS

REASONS UNDERLYING LONGER-TERM PRICE EXPECTATIONS negatives: further shrinkage of the banking sector mean credit will become more difficult to obtain, inadequate solution to the issues of indebtedness and unemployment will re-enforce the fear to spend, poor handling of the arrears crisis could lead to mass re-possessions and more units for sale in over-supplied areas, impact of emigration positives: resolution to the problems of the banking sector will see a more widespread access to credit, favourable demographics and the existence of a large pent-up demand following years of housing market inactivity, economic recovery underway, renters moving to purchase homes, a lack of supply in some areas will place upward pressure on prices, in certain regions promised infrastructure projects will be delivered upon increasing demand for houses there Again the most common reasons cited for why participants believe that prices will behave as they expect over the next three years are included above.

+1 YEAR (LHS) & +3 YEARS (RHS) PRICE EXPECTATIONS (SURVEY 2013Q2): NATIONAL VS. DUBLIN A comparison of respondents’ property price expectations, nationally (dark blue) and across the Dublin region (light blue), in the period ahead is presented in this slide.

+1 YEAR (LHS) & +3 YEARS (RHS) PRICE EXPECTATIONS (SURVEY 2013Q2): REGIONAL This slide presents a more regional picture of residential property price expectations, again for 1 and 3 years ahead.

SELECTED RESULTS (MARKET ACTIVITY) SURVEY 2013Q2 SELECTED RESULTS (MARKET ACTIVITY) In the following slides, a selection of results from the survey’s questions on residential property market activity in the quarter are presented.

SURVEY 2013Q2: MARKET ACTIVITY

SURVEY 2013Q2: MARKET ISSUES - SALES PRICES & PURCHASE METHOD

SURVEY 2013Q2: MARKET ISSUES - FAILED TRANSACTIONS & INFLUENCES ON MARKET DEMAND

IF YOU HAVE ANY COMMENTS/QUERIES ON THESE RESULTS, OR IF YOU ARE NOT INVOLVED IN THE SURVEY AT PRESENT AND YOU WOULD LIKE TO BE IN THE FUTURE - PLEASE CONTACT: GERARD KENNEDY gkennedy@centralbank.ie