Permanent TSB Group Holdings PLC · EURONEXT:PTSB
Permanent TSB — FY2008 Earnings Presentation
29 slides from Permanent TSB's earnings presentation, 2009
Slide 1: permanent tsb House Price Index 2008 Review
permanent tsb House Price Index 2008 Review
Slide 2: Agenda
2 House Price Index Agenda House Price Reports reviewed National and Regional 2008 findings Looking ahead in 2009 Summary Questions
Slide 3: House Price Reports reviewed
3 House Price Index House Price Reports reviewed Internationally recognised methodology A number of alternative measures - Different methodologies - Different datasets - Different points in the transaction cycle permanent tsb index uses transactions Time lag ptsb sample is broadly represen
Slide 4: House Price Reports reviewed
4 House Price Index House Price Reports reviewed “Extreme”/ Very expensive transactions may attract disproportionate coverage Regression statistics continue to perform well Omitted variables - Unobservables, e.g. fitted kitchens
Slide 5: House Price Change
5 House Price Index House Price Change 50 40 annual % change 30 20 10 0 -10 -20 -30 1996Q1 1998Q1 2000Q1 2002Q1 2004Q1 2006Q1 2008Q1 DoE DAFT.ie P tsb Sherry Fitz
Slide 6: Findings - 2008
6 House Price Index Findings - 2008
Slide 7: Key findings
7 House Price Index Key findings National house prices in 2008 fell by 9.1%, compared to a fall of 7.3% in 2007. Price reduction in Commuter Counties (-16.8%) greater than experience in Dublin (-11.7%) and Outside Dublin (-10.2%). Annual rate reduction for new house prices (-8.2%) less than th
Slide 8: Year on Year House Price Growth
8 House Price Index Year on Year House Price Growth - 2008 drop brings national prices to July ’05 levels National Dublin Outside Dublin CPI rate 2008 -9.1% -11.7% -10.2% 4.1% 2007 -7.3% -7.0% -6.4% 4.9% 2006 11.8% 15.9% 10.9% 4.0% 2005 9.3% 10.1% 9.2% 2.5% 2004 8.6% 8.9% 8.0% 2.2% 2003 13.8% 12.7%
Slide 9: National House Prices
9 House Price Index National House Prices Last three half year reductions broadly similar 11.0% 9.7% 7.3% 8.0% 6.9% 6.7% 6.4% 8.0% 4.9% 5.5% 4.7% 3.7% 3.8% 5.0% 2.5% 2.0% -2.6% -1.0% -0.4% -4.0% -4.7% -4.3% -7.0% -4.8% -10.0% Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec-
Slide 10: Dublin, Outside Dublin & Commuter counties
10 House Price Index Dublin, Outside Dublin & Commuter counties Commuter reduction more pronounced in 2008 Outside Dub 18% Dublin Commuter 13% 8% 3% -2%Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 -7% -12% Dec '03 Dec '04 De
Slide 11: National & Regional Price Trends
11 National & Regional Price Trends House Price Index – prices down to early 2006 levels 450 427 398 400 369 Dublin 380 350 Commuter 335 344 321 307 299 351 National 300 273 303 Outside Dublin 271 311 267 256 278 288 250 235 273 262 225 223 254 266 234 249 185 240 237 200 196 204 206 220 224 159 204
Slide 12: Regional House Prices - Growth since 1996
12 House Price Index Regional House Prices - Growth since 1996 Dublin, Mideast, SW outstrip National growth. 350.0% 333.1% 300.0% 259.6% 252.4% 256.7% 250.8% 249.0% 250.0% 208.4% 206.0% 196.3% 200.0% 150.0% e r es t es t SE nd al st SW in rd dl a n ea bl B o W i d w i at io id D u M M N M
Slide 13: Regional Prices – 2nd Half 2008 v 2nd Half 2007
13 House Price Index Regional Prices – 2nd Half 2008 v 2nd Half 2007 Variation in price movement across the regions 0% -2% -4% -6% 5.2%- 6.2%- 6.7%- -8% 7.3%- 7.8%- -10% 9.0%- 9.6%- -12% 11.1%- 11.7%- -14% SW l lin SE at t t nd r st na es es de ea ub la W io w or id id id D B M M M N
Slide 14: Existing V new houses
14 House Price Index Existing V new houses Prices dropping in relatively close alignment 25% New 20% Existing 15% 10% 5% 0% Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 -5% Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 New
Slide 15: First versus second time buyers
15 House Price Index First versus second time buyers Price fall in 2008 for FTBs almost twice that of STBs 20% FTB 15% STB 10% 5% 0% Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 -5% -10% Dec '03 Dec '04 Dec '05 Dec '06 Dec '0
Slide 16: Looking ahead….
16 House Price Index Looking ahead….
Slide 17: Emigration in 2009 – back to early ‘90s
17 House Price Index Emigration in 2009 – back to early ‘90s 80 60 40 20 '000s 0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 -20 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 -40 (Source: CSO) -60
Slide 18: Economy shrinking after many years of growth
18 Economy shrinking after many years of House Price Index growth Source ESRI 12 10 8 annual % change 6 4 2 0 1990 1993 1996 1999 2002 2005 2008 -2 -4 -6
Slide 19: Unemployment rate - forecasted to rise to 10% in 2009
19 House Price Index Unemployment rate - forecasted to rise to 10% in 2009 source ESRI 20 15 % 10 5 0 1988 1991 1994 1997 2000 2003 2006
Slide 20: House Completions
20 House Price Index Housing completions back to early ’90s levels Source: Department of the Environment (DOE) & ESRI House Completions 100,000 93,419 80,957 78,027 76,954 80,000 68,819 57,695 60,000 49,812 52,602 50,000 46,512 42,349 38,842 40,000 33,700 25,000 20,000 99 f 96 97 98 00 01 02 03 04 0
Slide 21: ECB Rate back to its lowest ever level
21 House Price Index ECB Rate back to its lowest ever level 5 4.5 4 3.5 3 % 2.5 2 1.5 1 0.5 0 Jun- Jun- Jun- Jun- Jun- Jun- Jun- Jun- Jun- 00 01 02 03 04 05 06 07 08
Slide 22: Rent & Price annual growth rates moving down to similar levels
M ar - -15% -10% 0% 5% 10% 15% 20% 25% 30% 35% -5% S 97 ep -9 M 7 ar - S 98 ep -9 M 8 House Price Index ar - S 99 ep -9 M 9 ar - S 00 ep -0 M 0 ar - S 01 ep -0 M 1 ar - S 02 ep -0 M 2 ar - S 03 ep -0 M 3 CSO - Rents Source ar - S 04 ep -0 M 4 ar - S 05 ep -0 M 5 ar - S 06 ep moving down to similar l
Slide 23: Summary
House Price Index Summary age permanent tsb
Slide 24: Summary & Conclusions
24 House Price Index Summary & Conclusions National house price reduction of 9.1% in 2008 Negative Factors – Economic contraction; unemployment; emigration Positive Factors – Declining completions and rate decreases Price reductions expected to continue during 2009
Slide 25: Appendices
25 House Price Index Appendices
Slide 26: Regional Listing
26 House Price Index REGIONAL LISTING BORDER - Cavan; Donegal; Leitrim; Louth; Monaghan; Sligo MIDEAST - Kildare; Meath; Wicklow MIDLANDS - Laois; Longford; Offaly; Westmeath MIDWEST - Clare; Limerick; Tipperary North SOUTH EAST - Carlow; Kilkenny; Wexford; Waterford; Tipperary South SOU
Slide 27: How is the Index calculated?
27 House Price Index How is the Index calculated? Constructed using internationally recognised economic methodology - hedonic regression Similar to methodology employed by Halifax and Nationwide in the UK Information on houses for which permanent tsb provides a mortgage – in excess 20% of mark
Slide 28: Hedonic Regression
28 House Price Index Hedonic Regression Regression gives predicted price for that period Log P = a + b1FTB + b2Semi-Det + b3Tce + b4Apt+ b5New + b6Footage + b7Garage…………. Co-efficients are the “implicit” price Replace the weights in each period with the base period weights
Slide 29: Calculating the price index
29 House Price Index Calculating the price index Index is calculated using set of characteristics frequencies (base year weights) and applying the successive set of prices Mix-adjusting to the base year Shows price in each period had the average dwelling size and mix of other characteristics b