Category: EU economy (14)

ECB officials, meeting under the presidency of Mario Draghi for the first time, cut the benchmark interest rate by 0.25 of a percentage point to 1.25 per cent.

The decrease in the ECB rate will see the cost of a typical €250,000 tracker mortgage fall by about €32 a month.

The Bank of England today kept interest rates at a record low of 0.5 per cent and made no increase to its unprecedented scheme of pumping money into an economy struggling to get back on its feet.

The decision was widely expected and analysts expect no change in monetary policy until much later this year as the central bank waits for a clearer recovery from the worst economic downturn since World War II.

If anything, BoE policymakers have left the door open to more monetary easing in the form of expanding their £200 billion scheme to buy assets with newly created money — quantitative easing in the jargon — if the economy worsens.

The euro zone economy jumped out of recession in the third quarter, data showed today, but with slightly less spring than expected after the area’s top three economies fell short of market forecasts.

Gross domestic product in the 16 countries using the euro rose 0.4 per cent quarter-on-quarter after five consecutive quarters of shrinking output, but was 4.1 per cent lower year-on-year.

Economists polled by Reuters had on average forecast quarterly growth of 0.5 per cent and a 3.9 per cent annual decline.

Germany, France and Italy all reported a third-quarter increase in economic output, but the German 0.7 per cent quarterly growth was below expectations of 0.8 per cent, the French 0.3 per cent increase only half of what was expected and the Italian 0.6 per cent fell short of the 0.7 per cent consensus.

The growth ends the deepest economic downturn in Europe since World War Two, brought on by a global financial crisis, but economists say recovery is likely to remain fragile.

The European Commission forecast on November 3rd that fourth-quarter growth would slow to 0.2 per cent quarter-on-quarter in the last three months of 2009 and then to 0.1 per cent in the first two quarters of 2010.

Growth is seen accelerating steadily from the third quarter of 2010 to reach 0.5 per cent in the second quarter of 2011.

Source: REUTERS

Poor interest rates and falling property prices have left wealthy investors looking for alternative asset classes to put their money into. A weak dollar yesterday pushed the gold price to a record high of $1,072 an ounce. Shoppers at department store Harrods are now able to buy the ultimate luxury accessory – gold bars.

Have these shoppers not heard of high yield buy-to-let investments with good capital growth potential in Central London? You could go to Harrods, or you could go to Findlay.

Some gold

Some gold

The European Central Bank signaled a cautious approach Thursday to withdrawing its unprecedented monetary stimulus for the European economy, as both it and and the Bank of England kept their benchmark interest rates steady. The Bank of England left its key rate at 0.5 percent, as some economists grow increasingly concerned that the British economic recovery could slow or even stall.

Source: International Herald Tribune

An unexpected rebound in French and German growth helped push the eurozone to the brink of economic recovery in the second quarter, delivering a further signal that the worst of the global crisis may be coming to an end in Europe.

Gross domestic product in the 16-nation currency bloc fell 0.1 per cent in April, May and June, the European statistics office said on Thursday, cheering economists who had expected a decline of 0.5 per cent after a drop of 2.5 per cent in the first quarter of the year.

Source:  FT.com

The Bank of England’s rate-setters have decided to pump another £50bn of new money into the economy in their programme of quantitative easing.

It will take their total spending to £175bn, unexpectedly going over the £150bn set aside by the chancellor.

In a statement, they said that the UK recession “appears to have been deeper than previously thought”.

The rate-setters also decided to keep interest rates unchanged at their historic low of 0.5% for a sixth month.

Also on Thursday, the European Central Bank decided to keep its interest rates unchanged at 1%.

The Irish Times has run a story about Findlay Property in this weeks property supplement.

Click here to read more.

John Walsh, Simon McDonnell & Jean-Paul Van Cauwelaert

John Walsh, Simon McDonnell & Jean-Paul Van Cauwelaert

Sourcing property for investors

PETER CLUSKEY

Thu, May 14, 2009

LONDON INVESTMENTS: EVEN IN a flat market, new transport links are guaranteed to generate interest, so the long-awaited extension of a train line to south Hackney in east central London is already attracting investment.

Prices across the city are down by an average of 10–15 per cent since 2007, and agents say sales have virtually ground to a halt – so it’s a buyer’s market, with particular value for euro zone buyers.

“People in London are extremely conscious of the availability of transport when they buy or rent.” says Simon McDonnell, director of Findlay Property, which specialises in sourcing investment properties for Irish clients. “So when the new East London Line opens here in July 2010, we anticipate an immediate increase in property values of around 10 per cent. We’ve already been buying property within walking distance of where the stops are going to be.”

South Hackney, says McDonnell, was one of the last areas of central London resisting gentrification, but that’s changed, particularly in neighbourhoods like Shoreditch and London Fields.

“It’s within walking distance of The City and there’s easy access to the West End, so the train will put in place the element that’s been missing,” says McDonnell.

Three of the four directors of Findlay Property are Irish: Simon McDonnell, John Walsh and John Paul Van Cauwelaert. The fourth is Scot Alan Findlay. They set up the business in a small East End flat in 2001 and now operate from the more salubrious environs of Broadway Market.

“We’re not an estate agency,” says McDonnell. “We’re a property management company which sources properties on behalf of its clients and then manages it for them afterwards.

“Almost 100 per cent of our clients are Irish. Roughly a third of our properties are ex-local authority, a third are luxury modern apartments and a third are Victorian townhouses. So, if someone says he has €250,000 to spend and is looking for a rental yield of 7 per cent, we’ll source the property for him.”

Typically, a three-bed ex-local authority property can be bought for around €235,000. Findlay charges a 2 per cent finder’s fee, which could come to €5,000; refurbishment costs another €5,000; stamp duty adds €2,500; legal fees another €1,000; and furniture and white goods €2,000. That’s €250,000 all in – the cheapest McDonnell would recommend.

As to the “Olympic factor”, the well-documented boost to property prices before the games come to town in 2012, McDonnell is not really convinced. “The Olympics are on our doorstep, but I’m cautious about claiming too much for them. For me, the chief benefit will be the long-term one of improved infrastructure.”

www.127.0.0.1/oldfind

© 2009 The Irish Times

The European Central Bank cut its benchmark interest rate by 25 basis points to a new record low of 1 per cent today, as expected.

European Central Bank President Jean-Claude Trichet said the euro-zone economy was showing tentative signs of stabilising at a very low level.

The European Commission has forecast that the end of the recession is in sight.

The Bank of England has kept interest rates on hold at 0.5% and announced that it will inject an extra £50bn into the UK economy.

ECB HQ Frankfurt

ECB HQ Frankfurt

Rents across Ireland have fallen 5 per cent in the first three months of this year, according to report published today.

In its latest survey on the rental market, property website Daft.ie found the national average rent is now €840 per month, a drop of €160 on the same period last year.

The major cities experienced the biggest drops, the report found. In Dublin and Limerick, cities rents were down by up to 6.5 per cent, while in Waterford city and Cork city, rents fell by 5.3 per cent and 5.1 per cent respectively.

Nationwide rents have posted falls for 14 consecutive months and are 17.5 per cent lower than the peak in early 2008.

“The rental market is feeling the brunt of too much supply and not enough demand,” said Ronan Lyons, economist with Daft. “The number of properties available for rent is now over 23,000 – an all time high. This additional supply is having a downward effect on price and is also pushing out the time it is taking to rent properties”.

The Daft Rental Report is based on an analysis of all rental properties advertised on Daft.ie since January 2009, including 250,000 since January 2008.

Sources: Irish Times & Daft