Permanent TSB Group Holdings PLC · EURONEXT:PTSB
Permanent TSB — FY2007 Earnings Presentation
29 slides from Permanent TSB's earnings presentation, 2008
Slide 1: permanent tsb House Price Index 2007 Review
permanent tsb House Price Index 2007 Review
Slide 2: Agenda
2 House Price Index Agenda National and Regional 2007 findings Looking ahead in 2008 Summary Questions
Slide 3: Findings - 2007
3 House Price Index Findings - 2007
Slide 4: Key findings
4 House Price Index Key findings National house prices in 2007 fell by 7.3%, compared to growth of 11.8% in 2006. Price reduction nationally in the 2nd half of 2007 (-4.7%) was almost twice the rate in the 1st six months (-2.6%). Price reduction in Dublin (-7.0%) greater than experience in Com
Slide 5: Year on Year House Price Growth 2000 - 2007
5 House Price Index Year on Year House Price Growth 2000 - 2007 National Dublin Outside Dublin 2007 -7.3% -7.0% -6.4% 2006 11.8% 15.9% 10.9% 2005 9.3% 10.1% 9.2% 2004 8.6% 8.9% 8.0% 2003 13.8% 12.7% 13.0% 2002 13.3% 15.9% 12.5% 2001 4.5% 4.4% 5.1% 2000 21.3% 21.8% 21.8% Drop in national growth in 20
Slide 6: National House Prices
6 House Price Index National House Prices Largest reduction in 2nd half of last year. 13.0% 10.6% 9.7% 10.0% 7.3% 8.0% 6.9% 6.4% 6.7% 7.0% 5.5% 4.9% 4.7% 3.7% 3.8% 4.0% 2.5% 1.0% -0.4% -2.6% -2.0% -4.7% -5.0% Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- 00 00 01 01
Slide 7: Dublin, Outside Dublin & Commuter counties
7 House Price Index Dublin, Outside Dublin & Commuter counties Close alignment of annual price movement. Outside Dub 17% Dublin Commuter 12% 7% 2% Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 -3% Dublin 12.7% 8.9%
Slide 8: National & Regional Price Trends
8 National & Regional Price Trends House Price Index – prices down to early 2006 levels 450 427 398 400 Dublin 369 350 Commuter 335 344 307 299 321 National 273 311 300 Outside Dublin 271 288 256 278 250 223 266 254 249 234 240 200 206 220 204 180 150 92 100 82 Figures in €'000s 80 74 50 1996 1997 1
Slide 9: Regional House Prices - Growth since 1996
9 House Price Index Regional House Prices - Growth since 1996 Dublin, Mideast, SW outstrip National growth. 400% 370% 375% 350% 325% 298% 301% 300% 274% 274% 282% 275% 250% 225% 226% 230% 225% 200% 175% lin l nd r st t t SW SE na es de es ea ub la io w W or id id id at D B M M M N
Slide 10: Regional Prices – 2nd Half 2007 v 2nd Half 2006
10 House Price Index Regional Prices – 2nd Half 2007 v 2nd Half 2006 Variation in price movement across the regions 0% -1% -2% -3% -4% 4.1%- -5% 5.5%- 5.5%- 5.8%- -6% 6.3%- -7% 6.9%- -8% 7.4%- 8.2%- -9% -10% l nd r st t t SW SE na es de es ea la io w W or id id id at B M M M N
Slide 11: Existing versus new houses
11 House Price Index Existing versus new houses Annual % reduction for existing houses more than twice that for new. 25% New 20% Existing 15% 10% 5% 0% Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 -5% New 10.8% 12.
Slide 12: First versus second time buyers
12 House Price Index First versus second time buyers Rate movement for FTBs & STBs continues in relatively close alignment. 20% FTB 15% STB 10% 5% 0% Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 -5% FTB 14.7% 7.9%
Slide 13: Looking ahead....
13 House Price Index Looking ahead….
Slide 14: Home ownership rates in Ireland
14 House Price Index Home ownership rates in Ireland are amongst the highest in the world. 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Ireland UK France Germany Spain Italy EU Average US
Slide 15: Annual rent growth rising while house price growth reducing
15 House Price Index Annual Rent growth rate rising while house price growth reducing 35.0% Prices 30.0% Rent 25.0% 20.0% 15.0% 12.3% 10.0% 5.0% 0.0% Se 7 07 M 5 Se 6 M 6 M 3 Se 4 M 4 Se 5 Se 2 M 2 Se 3 Se 0 M 0 Se 1 M 1 M 8 Se 9 M 9 Se 7 M 7 Se 8 0 0 0 0 0 0 0 9 9 9 -5.0% -0 -0 -0 -0 -0 -0 -9 -0 -0
Slide 16: Net Migration - 25 years
16 House Price Index Net inward migration set to continue……. Net Migration - 25 years 80 60 40 20 '000 0 -20 -40 -60 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 (Source: CSO)
Slide 17: Unemployment rate lower than EU average
17 Unemployment rate continues to be lower House Price Index than 6.4% EU area average Source ESRI 20 15 % 10 5 0 1988 1991 1994 1997 2000 2003 2006
Slide 18: Demographics
18 House Price Index Demographics Source CSO Over 60 yrs 40-60 yrs 20-40 yrs < 20 yrs 0 200 400 600 800 1000 1200 1400 1600 2006 2002 1996
Slide 19: Economic growth (GNP) to out-perform EU average
19 Economic growth (GNP) to out-perform House Price Index EU average (1.9%) Source ESRI 12 10 annual % change 8 6 4.4% 4 2.3% 2 0 1990 1993 1996 1999 2002 2005
Slide 20: Employment growth easing but positive
20 Employment growth easing but positive House Price Index - Source ESRI 7 6 5 annual % change 4 3.0% 3 2 1 0.4%* 0 -1 1987 1990 1993 1996 1999 2002 2005 2008 * 0.4% growth equates to 8,000 net new jobs in 2008
Slide 21: Growth in personal income to remain strong
21 House Price Index Growth in personal income to remain strong Source ESRI 16 14 12 10 8 6 4 2 0 1996 1998 2000 2002 2004 2006 2008 Personal income Personal disposable income
Slide 22: Summary
House Price Index Summary age permanent tsb
Slide 23: Summary & Conclusions
23 House Price Index Summary & Conclusions National house price reduction of -7.3% in 2007. Economic indicators remain positive. Internal variables remain solid, while concerns expressed for world economy. Customer sentiment continues to be key market driver.
Slide 24: Appendices
24 House Price Index Appendices
Slide 25: Regional Listing
25 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.
Slide 26: How is the Index calculated?
26 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 27: Hedonic Regression
27 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 28: Calculating the price index
28 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
Slide 29: House Completions
29 House Price Index House completions – supply adjusting to demand. House Completions 100,000 93,419 90,000 80,957 76,954 78,027 80,000 68,819 70,000 57,695 60,000 49,812 52,602 50,000 50,000 42,349 46,512 38,842 40,000 33,700 30,000 f 96 99 06 07 97 00 01 02 04 05 98 03 08 19 19 20 20 20 20 20 20