Marian Finnegan
Chief Economist
Sherry FitzGerald Group
PII Seminar, June 28, 2012

Ireland’s Emerging Property Needs……….
 Residential Market
 Demand and Supply
 Price Performance
 Commercial Market
 Occupier trends – Regional Office Market
 Irish Retail Market
 Concluding comments

Demand: Ireland’s Population
5000000
4500000
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
1901 1926 1946 1956 1966 1979 1986 1996 2006
Population: 4.58 million in 2011, 8.2% growth on 2006

Demographic Profile
 0-14 Years:
 15-24 Years:
 25-49 Years:
 50-64 Years:
 65 Years plus:
 Total
979,590
580,250
1,755,325
737,694
535,393
4,588,252
21%
13%
38%
16%
12%
100%

Demographic Profile - Dependency Levels
 0-14 Years:
 15-24 Years:
 25-49 Years:
 50-64 Years:
 65 Years plus:
Ireland
21%
13%
38%
16%
12%
Germany
13%
21%

How we live today 2011:
Permanent Private Households
Own with Mortgage or Loan
Own Outright
Renting from Private Land Lord
Renting from Local Authority
Voluntary/Co-op
Live rent free
Not Stated
1,649,408
583,148
566,776
305,377
129,033
14,942
25,436
24,696

How we live in 2011 compared to 2006:
Permanent Private Households
Own with Mortgage or Loan
Own Outright
Renting from Private Land Lord
Renting from Local Authority
Voluntary/Co-op
Live rent free
Not Stated
1,649,408 (1,462,296)
583,148 (593,513)
566,776 (498,432)
305,377 (145,317)
129,033 (105,509)
14,942 (50,480)
25,436 (21,701)
24,696 (47,344)

Current Demand - An analysis of Purchasers
An analysis of Completed Sales in H1 2012
• Owner Occupation 81%
• Investment 11%
• Additional Residence
• Development/other
6%
2%
• First Time Buyers 29%
An analysis of Sales Agreed in Dublin in H1 2012
• 40% of purchasers bought with 100% CASH

Future Demand, Demographic Projections
Year
2011
2016
2021
2026
Population
4.58 million
4.78 million
4.96 million
5.10 million
Source: Sherry FitzGerald Research

Future Demand, Demographic Projections
Year
2012-16
2016-21
2021-26
Average PA
Housing Demand
26,000
34,000
31,000
30,200
Source: Sherry FitzGerald Research

Supply Analysis

Housing Completions 1970-2011
100,000
90,000
80,000
70,000
60,000
50,000
40,000
LT average: 34,441 units
30,000
20,000
10,000
0
1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011

Second Hand Supply as a % of Total Private Housing Stock

New Supply as a % of Total Private Housing Stock

Total Supply as a % of Private Housing Stock

Stock for Sale compared to vacancy levels
Census 2012
 1.64 million Occupied Households
 11,000 Properties Occupied by Visitors
 45,000 Residents Temporarily Absent
 168,000 Vacant Houses
 62,000 Vacant Apartments
 59,000 Holiday Homes
 230,000 Vacant Dwelling – excluding holiday homes

Stock for Sale compared to vacancy levels
What might they be:
 27,000: 50% of houses for sale are vacant
 18,600 complete and vacant new homes
 36,000 Private buy to let properties vacant
 14,000 Local Authority Properties vacant
 95,000 Explained Vacancy
 135,000 Unexplained Vacant Dwelling

Dublin Second-hand Market
800
700
600
500
400
300
200
-66.7%
100
0
Q
1
19
96
Q
4
19
96
Q
3
19
97
Q
2
19
98
Q
1
19
99
Q
4
19
99
Q
3
20
00
Q
2
20
01
Q
1
20
02
Q
4
20
02
Q
3
20
03
Q
2
20
04
Q
1
20
05
Q
4
20
05
Q
3
20
06
Q
2
20
07
Q
1
20
08
Q
4
20
08
Q
3
20
09
Q
2
20
10
Q
1
20
11
Q
4
20
11
Sherry FitzGerald Barometer of House Prices

Dublin Second-hand Market
800
700
600
500
400
300
200
100
0
Q
3
20
06
Q
4
20
06
Q
1
20
07
Q
3
20
07
Q
4
20
07
Q
1
20
08
Q
2
20
08
Q
3
20
08
Q
4
20
08
Q
1
20
09
Q
2
20
09
Q
3
20
09
Q
4
20
09
Q
1
20
10
Q
2
20
10
Q
3
20
10
Q
4
20
10
Q
1
20
11
Q
2
20
11
Q
3
20
11
Q
4
20
11
Q
1
20
12
Q
2
20
12
Sherry FitzGerald Barometer of House Prices

Dublin Second-hand Market
800
700
600
500
400
300
200
100
0
Q
3
20
06
Q
4
20
06
Q
1
20
07
Q
3
20
07
Q
4
20
07
Q
1
20
08
Q
2
20
08
Q
3
20
08
Q
4
20
08
Q
1
20
09
Q
2
20
09
Q
3
20
09
Q
4
20
09
Q
1
20
10
Q
2
20
10
Q
3
20
10
Q
4
20
10
Q
1
20
11
Q
2
20
11
Q
3
20
11
Q
4
20
11
Q
1
20
12
Q
2
20
12
Sherry FitzGerald Barometer of House Prices

Ireland Second-hand Market
250
200
150
100
-63.1%
50
0
Q
1
20
02
Q
3
20
02
Q
1
20
03
Q
3
20
03
Q
1
20
04
Q
3
20
04
Q
1
20
05
Q
3
20
05
Q
1
20
06
Q
3
20
06
Q
1
20
07
Q
3
20
07
Q
1
20
08
Q
3
20
08
Q
1
20
09
Q
3
20
09
Q
1
20
10
Q
3
20
10
Q
1
20
11
Q
3
20
11
Q
1
20
12
Sherry FitzGerald Barometer of House Prices

Ireland Second-hand Market
250
200
150
100
50
0
Q
2
20
07
Q
3
20
07
Q
4
20
07
Q
1
20
08
Q
2
20
08
Q
3
20
08
Q
4
20
08
Q
1
20
09
Q
2
20
09
Q
3
20
09
Q
4
20
09
Q
1
20
10
Q
2
20
10
Q
3
20
10
Q
4
20
10
Q
1
20
11
Q
2
20
11
Q
3
20
11
Q
4
20
11
Q
1
20
12
Q
2
20
12
Sherry FitzGerald Barometer of House Prices

Ireland Second-hand Market
250
200
150
100
50
0
Q
2
20
07
Q
3
20
07
Q
4
20
07
Q
1
20
08
Q
2
20
08
Q
3
20
08
Q
4
20
08
Q
1
20
09
Q
2
20
09
Q
3
20
09
Q
4
20
09
Q
1
20
10
Q
2
20
10
Q
3
20
10
Q
4
20
10
Q
1
20
11
Q
2
20
11
Q
3
20
11
Q
4
20
11
Q
1
20
12
Q
2
20
12
Sherry FitzGerald Barometer of House Prices

CSO v Sherry FitzGerald – Dublin Index
Dublin Residential Index - CSO & Sherry FitzGerald
100
80
60
40
20
0
160
140
120
2
0
0
5
M
0
3
2
0
0
5
M
0
6
2
0
0
5
M
0
9
2
0
0
5
M
1
2
2
0
0
6
M
0
3
2
0
0
6
M
0
6
2
0
0
6
M
0
9
2
0
0
6
M
1
2
2
0
0
7
M
0
3
2
0
0
7
M
0
6
2
0
0
7
M
0
9
2
0
0
7
M
1
2
2
0
0
8
M
0
3
2
0
0
8
M
0
6
2
0
0
8
M
0
9
2
0
0
8
M
1
2
2
0
0
9
M
0
3
2
0
0
9
M
0
6
2
0
0
9
M
0
9
2
0
0
9
M
1
2
2
0
1
0
M
0
3
2
0
1
0
M
0
6
2
0
1
0
M
0
9
2
0
1
0
M
1
2
2
0
1
1
M
0
3
2
0
1
1
M
0
6
2
0
1
1
M
0
9
2
0
1
1
M
1
2
2
0
1
2
M
0
3
2
0
1
2
M
0
6
CSO Index Sherry FitzGerald Index

What does all this mean for residential property?
• It’s the Economy…………….
• Established Market - Property Prices will fall during 2012 on macro basis - peak to trough in order of : 65%+
• Notable latent demand in Economy, confidence and lending remain a challenge
• 26 County Market – each location will perform differently in years ahead, Dublin likely to outperform all other locations
• First to recover: Family homes – Potential for price inflation
• Medium term: 2012-2021: Requirement for 30,000 PA

Occupier Trends

Dublin Office Market 1990 – 2011
Sq M.
350000
%
25%
300000
250000
200000
150000
20%
15%
100000
50000
10%
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
5%
-50000
-100000 0%
Take Up Net Take Up Vacancy Rate

Dublin Office Market, Q2 2012*
Market Stock
Take Up
Availability
Vacancy Rate
Under
Construction
Pre-let
Dublin Q2 2012
3.35 million sq m
(2011: 128,000 sq m)
H1: 56,200 sq m
748,700 sq m
Central Business
District Q2 2012
1.71 million sq m
(2011: 66,700 sq m)
H1:37,900 sq m
266,600 sq m
22.3% 15.5%
0 sq m
0%
0 sq m
0%
* Preliminary data

Total Office Availability in CBD by Grade Q2 2012*
% Grade
A1
A2
A3
Sub Total
B1
B2
Sub Total
Total
Sq M
107,500
28,800
36,800
173,100
14,600
78,900
93,500
266,600
Source – DTZ Sherry FitzGerald Research
* Preliminary data
%
40
11
14
5
30
100.0
65
35
100.0

Analysis of A1 Supply*
A1 Size
<1,000 Sq. M.
> 1,000 <
5,000 Sq. M.
> 5,000 <
10,000 Sq. M.
>10,000 Sq. M.
Total
No. of Offices
12
12
2
5
33
Sum of
Availability
7,450
26,350
10,600
63,150
107,550
* Preliminary data
%
7%
25%
10%
58%
100%

Regional Commercial Office Markets, Q2 2012
Market Stock
Take Up – YtD
Availability
Vacancy Rate
Under
Construction
Pre-let
Galway
293,000 sq m
3,400 sq m
38,400 sq m
13.1%
0 sq m
Redev: 6,050 sq m
0%
Cork
510,650 sq m
4,700 sq m
128,550 sq m
22.6%
26,700 sq m
17%
Limerick
305,300 sq m
5,350sq m
74,700 sq m
22.3%
0 sq m
0%

Ireland - GLA Density by County - 2012

Distribution of Shopping Centres in Ireland

Concluding Comments
 Emerging signs of stability in niche markets
 Stability emerging in Dublin housing market, and eastern corridor
 Other regional centres to follow, Cork and Galway
 Constrained supply of Grade A offices in Dublin CBD
 Secondary and suburban markets remain under pressure into medium term
 Galway market stabilising, Cork to follow
 Need for regeneration of existing shopping centre space, potential for a second European standard shopping centre.