Permanent TSB Group Holdings PLC · EURONEXT:PTSB
Permanent TSB — H1 2007 Earnings Presentation
29 slides from Permanent TSB's earnings presentation, June 2007
Slide 1: ESRI/permanent tsb House Price Index Half Year Results June 2007
ESRI /permanent tsb House Price Index Half Year Results June 2007
Slide 2: Agenda
2 House Price Index Agenda How the ESRI/ptsb Index is calculated National and Regional findings Demand Outlook Summary & Forecast Questions?
Slide 3: How is the Index calculated?
3 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 marke
Slide 4: Hedonic Regression
4 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 5: Calculating the price index
5 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 be
Slide 6: References
6 House Price Index References Methodology note on websites Conniffe, D., and D.Duffy, 1999, “Irish House Price Indices: Methodological Issues” Economic and Social Review, Vol.30, No.4, October, (www.esri.ie)
Slide 7: 1st Half 2007 Findings
7 House Price Index 1st Half 2007 Findings
Slide 8: Key findings
8 House Price Index Key findings National house prices reduced by 2.6% in first six months of 2007. 1st half price reduction greater Outside Dublin (3.2%) than in Dublin (2.0%). Prices were reduced by 3.9% in the Commuter counties, year to date June 2007. Reduction in the 1st half for FTBs (
Slide 9: Year to Date House Price Growth 1999 - 2007
Year to Date House Price Growth 1999 - 2007 9 House Price Index First time within the Index that a negative 1st Half figure has been registered. June prices National Dublin Outside Dublin 2007 -2.6% -2.0% -3.2% 2006 8.0% 9.2% 7.9% 2005 2.5% 3.5% 2.3% 2004 4.7% 4.2% 5.8% 2003 6.9% 7.2% 5.5% 2002 5.5%
Slide 10: National House Prices
10 House Price Index National House Prices Negative growth in first half of 2007, compared 6-month rates. 13.0% 10.6% 10.0% 9.7% 8.0% 7.3% 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% Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05
Slide 11: Dublin, Outside Dublin & Commuter counties
11 Dublin, Outside Dublin & Commuter counties House Price Index YOY growth rate in Dublin to June 2007 reducing though at a slower rate than the Commuter Counties and Outside Dublin. 19% Outside Dub Dublin Commuter 14% 9% Jun '04 Jun '05 Jun '06 Jun '07 4.1% 4% Dublin 9.6% 8.2% 16.1% 4.1% Outside Du
Slide 12: National & Regional Price Trends
12 House Price Index National & Regional Price Trends - Change in price trends YTD June 2007 450 427 419 400 Dublin 369 Commuter 335 350 344 National 307 331 299 300 273 311 303 Outside Dublin 271 256 278 250 223 254 266 258 234 240 200 206 220 204 150 180 92 100 82 Figures in €'000s 80 50 74 5 6 1
Slide 13: Existing versus new houses
13 House Price Index Existing versus new houses YOY growth in new and existing house prices moving in close alignment. 20% New Existing 15% 10% 5% Jun '04 Jun '05 Jun '06 Jun '07 New 14.7% 8.3% 13.7% 1.7% 1.7% Existing 10.8% 6.5% 12.3% 1.0% 1.0% 0% Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Ju
Slide 14: First versus second time buyers
14 House Price Index First versus second time buyers FTB YOY growth rates moving in relative alignment with STBs. 20% FTB STB 15% 10% 5% Jun '04 Jun '05 Jun '06 Jun '07 FTB 10.0% 8.0% 16.4% 0.6% STB 12.1% 5.7% 15.3% 0.7% 0% Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06
Slide 15: Regional House Prices - Growth since 1996
15 House Price Index Regional House Prices - Growth since 1996 Dublin, Mideast & SW outstrip National growth. 391% 400% 375% 350% 316% 318% 325% 297% 301% 289% 300% 255% 275% 243% 250% 233% 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 16: Regional House Prices
16 Regional House Prices House Price Index First half 2007 growth - 6 Month average rate 1% 0% 0% -1% 1%- 1%- 1%- -2% 2%- 2%- 2%- -3% -4% 4%- -5% 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 17: Demand and Supply factors
17 House Price Index Demand and Supply factors
Slide 18: ECB Rate Movement
18 House Price Index ECB Rate Movement 5.00% 4.75% 4.50% 4.50% 4.00% 3.50% 3.50% 3.25% 3.00% 3.00% 2.75% 2.50% 2.25% 2.00% 2.00% 2.00% 1.50% 1.00% 0.50% 0.00% 1999 2000 2001 2002 2003 2004 2005 2006 2007f
Slide 19: House Completions
19 House Price Index Housing completions peaked in 2006 Source: Department of the Environment (DOE) House Completions 100,000 93,419 90,000 80,957 76,954 80,000 75,000 68,819 70,000 65,000 57,695 60,000 49,812 52,602 50,000 42,349 46,512 38,842 40,000 33,700 30,000 96 97 98 20 f 99 f 00 01 02 03 06
Slide 20: Demographics
20 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 21: Net Migration Inflows forecast to remain strong
21 House Price Index Net Migration Inflows forecast to remain strong Source ESRI 80 70k 60 50k 40 25k 20 0 -20 -40 -60 1980 1984 1988 1992 1996 2000 2004 2008f
Slide 22: Economic growth (GNP) to out-perform EU average
22 Economic growth (GNP) to out-perform House Price Index EU average Source ESRI 12 10 annual % change 8 6 4.8% 3.7% 4 2 0 1990 1993 1996 1999 2002 2005
Slide 23: Employment growth easing but positive
23 Employment growth easing but positive House Price Index - Source ESRI 7 6 5 annual % change 4 2.8% 3 2 1.2% 1 0 -1 1987 1990 1993 1996 1999 2002 2005 2008
Slide 24: Unemployment rate continues to be lower than EU area average
24 Unemployment rate continues to be lower House Price Index than 7.5% EU area average Source ESRI 20 15 % 10 5 0 1988 1991 1994 1997 2000 2003 2006
Slide 25: Personal Gross Income growth set to remain strong
25 Personal Gross Income growth set to House Price Index remain strong Source ESRI 10 8 annual % change 5.5% 6 5.0% 4 2 0 1990 1993 1996 1999 2002 2005 2008
Slide 26: Summary
House Price Index Summary age permanent tsb
Slide 27: Summary & Conclusions
27 House Price Index Summary & Conclusions National house prices have reduced by 2.6% in the first half of 2007. Economic indicators and fundamentals remain positive. ECB rate increases and local consumer sentiment the watchouts. Forecast price stability for 12-18 months.
Slide 28: Appendix
28 House Price Index Appendix
Slide 29: Regional Listing
29 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.
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