Syndicated News Archives - Kelly Rahill Accountants

Home building levels reach 10 year high – Goodbody

21,500 new homes were completed last year, according to new analysis from stockbrokers Goodbody, up 19% on the figure for 2018.

The increase marked the highest rate of growth in a decade and is nearly five times greater than the 2013 trough of 4,575.

However it still sits below the 34,000 units that the Central Bank estimates needs to be built each year up to 2030 in order to meet demand.

Goodbody uses the issuing of new energy ratings for calculating the number of new homes. This is seen to be a more accurate gauge of new builds than ESB connections, which can be muddied somewhat by old buildings getting reconnected. 

In today’s analysis, Goodbody noted that commuter counties saw the biggest number of new home completions last year as more and more buyers are priced out of Dublin. 

The stockbrokers said that homebuilding in Dublin increased by just 2%, pushing urban sprawl out into the Mid East region. 

Dublin represented 33% of completions last year, down from 38% in 2018 but still ahead of its share of the national population. 

Today’s figures show that the Mid-East region saw a surge of 36% in home completions in 2019, despite a slowdown in the growth rate in the fourth quarter of the year. 

All other regions experienced growth in completions in 2019, with the Midlands seeing a 61% increase and the West reporting a rise of 46%. 

Goodbody noted that the building of apartments surged by 55% last year, led by Dublin. 

But the stockbrokers said that apartments continue to represent a very low share of output in the country’s residential sector and the sector is estimated to represent 17% of home completions last year. 

This is the lowest share in Europe and is well behind the average of 59% in 2019.

Goodbody said that the growth in the apartment sector is very much led by the Build-to-Rent sector and cautioned that any moves to restrict this sector would have detrimental effects on the trajectory of new supply.

Dermot O’Leary, Goodbody’s chief economist, said that there are many moving parts in Ireland’s residential construction sector. 

“The build-to-rent sector is driving apartment building, while the public sector and Approved Housing Bodies (AHBs) are contributing to a surge in social housing,” Mr O’Leary said. 

“In the private market, we showed in our analysis in 2019 that those builders selling at the lower end of the price distribution are achieving significant volume growth, a feature of the recent updates by both Cairn and Glenveagh,” he added. 

“We are forecasting completions to grow to 24,000 in 2020, but these trends are likely to feature prominently once again,” the economist said.

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Ireland has fifth largest number of billionaires per capita – Oxfam

A new study has found that Ireland has the fifth largest number of billionaires relative to its population of any country in the world.

The report, produced by Oxfam ahead of the start of the World Economic Forum in Davos, claims that with 17 billionaires, most of whom are men, Ireland is mirroring the global trend on wealth inequality.

It says this inequality is now out of control, with 2,153 billionaires around the world now owning more wealth than 4.6 billion people who make up 60% of the Earth’s population.

Only Hong Kong, Cyprus, Switzerland and Singapore have more billionaires per capita than Ireland does.

The analysis claims this inequality is trapping millions of people in poverty, with half of the world’s population now living on under €5 a day.

Within this massive group, women are particularly badly impacted, it states, as they do not get properly rewarded for the care work they do.

In looking after children and the elderly, they make a contribution worth $10.8bn a year to the global economy, and €24bn in Ireland.

This is three times the amount of value generated by the technology industry.

Women and girls around the world are putting in 12.5 billion hours of unpaid care work every day and do more than three-quarters of all such work.

38 million hours of that work is done by women in Ireland.

“Sexist economies are fuelling the inequality crisis – enabling a wealthy elite to accumulate vast fortunes at the expense of ordinary people and particularly women and girls,” according to Jim Clarken, Chief Executive of Oxfam Ireland.

“Our upside-down economic system deepens inequality by chronically undervaluing care work – usually done by women and girls.”

According to Oxfam 2.3 billion people will require care by 2030, up 200 million from 2015, putting further pressure on caregivers.

Oxfam claims the inequality has been fueled by the policies of governments around the world, who have under taxed the wealthiest in society and underfunded the public services and infrastructure necessary to reduce women’s workloads.

Such services include electricity, childcare, public health and sanitation.

Oxfam has called for governments to create fairer systems and crack down on tax loopholes.

If the wealthiest paid 0.5% more in tax on their wealth over the next ten years it could raise enough money to create 117 million jobs.

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ComReg cuts 1800 Freephone services costs for businesses

ComReg is introducing measures that will reduce the costs for businesses and charities offering ‘1800’ Freephone numbers to users of their services. 

Calls to 1800 Freephone numbers are free to the caller, but it has been very costly for business and organisations who offer services and helplines over such numbers to provide such services. 

ComReg said this was partly due to high operator-to-operator charges levied by telephone network operators. 

The regulator said it will set the rates that network operators can charge to originate a call to an 1800 Freephone number to a maximum of 0.87 cent per minute from a fixed network or 1.62 cent per minute from a mobile network. 

1800 Freephone numbers had previously been as high as 34 cents per minute.

These new rates will come into effect from May 1. 

ComReg said up to 280 million calls are made every year to Non-geographic Numbers (NGNs) on average.

It is anticipated that the reduction in price will allow more organisations to offer 1800 Freephone numbers to their customers and callers – especially those who offer important services and helplines, the telecommunications regulator said. 

Transparency and consistency around the rates for 1800 Freephone numbers will bring clarity to the market and allow organisations to compare 1800 offers, it added.

ComReg Chairperson and Commissioner Garrett Blaney said that 1800 Freephone numbers provide access to important services for many people in Ireland, from mental health and child protection helplines, as well as banking and other customer service helplines.  

He said that ComReg has undertaken an extensive analysis of Non-geographic Numbers (NGNs), including 1800 Freephone numbers, which showed that an estimated 44% of organisations would consider using NGNs in future if the organisation costs reduced. 

“By making 1800 Freephone numbers a more cost-effective option, we hope that we will see more organisations use this NGN range which will allow their callers to access services for free,” Mr Blaney added.

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Dublin Port reports strong growth in EU trade volumes

Dublin Port Company has again reported record growth figures for 2019 as trade with the European Union countries experienced strong growth. 

Volumes on Ro-Ro (Roll-on/roll-off) and Lo-Lo (life-on/lift off) services to Continental Europe grew by 10.7%, but UK volumes fell by 0.2%. 

Dublin Port reported growth in unitised volumes (both Ro-Ro and Lo-Lo combined) of 3.6% to a total of 1.5 million units.  

It noted that over the six years since the economic recovery began in 2013, unitised trade has grown by over 41%. 

But it said the continued strength in unitised growth was offset by a large one-off decline in bulk solid commodities and, as a result, overall tonnage growth for the year was just 0.4%.

Dublin Port said its RoRo volumes grew by 2.6% to 1.1 million units, while its Lo-Lo container volumes grew by 6.5% to 774,000 units. 

Bulk liquid volumes – mostly petroleum products – grew by 0.9% to 4.7 million tonnes driven by increasing activity in the road transport and aviation sectors.

But bulk solid commodities declined by 23.4% to 1.8 million tonnes due to a number of factors, including the fact that 2018 had been an exceptionally strong year for agri-feed imports. 

2019 also saw exports from Boliden Tara Mines ceasing for a four-month period while major construction works in Alexandra Basin were proceeding.

Dublin Port said that these works are now complete, and exports of lead and zinc ore concentrates have fully resumed.  

Meanwhile, ferry passenger volumes increased by 6.7% to 1,949,000 last year, while the number of tourist vehicles increased by 9.9% to 560,000.

Dublin Port’s cruise business grew again with 158 cruise ship arrivals, up from 150 in 2018 and growth of 16.7% in visitor numbers.  

It noted that the average size of cruise ship increased again reaching 55,648 gross tonnes in 2018, an increase of 11.1% compared to 2018.

Dublin Port’s chief executive Eamonn O’Reilly said last year’s dominant feature was the continued strong growth in the unitised modes with Ro-Ro ahead by 2.6% and Lo-Lo by 6.5%. 

But he said that behind these growth figures Dublin Port saw a marked difference between the UK and the EU-26, adding that UK volumes declined by 0.2%, while volumes on Ro-Ro and Lo-Lo services to Continental Europe grew very strongly by 10.7%.  

“The effect of the deployment in recent years of new ships on direct routes to Continental Europe by shipping lines such as Irish Ferries and CLdN is clear to be seen and we expect to see this trend continue as trading patterns adapt post Brexit,” he added.

Mr O’Reilly said the continued large growth in unitised volumes underpins the need for Dublin Port Company to continue the major €1 billion investment programme from now to 2029. 

In December, it finalised a €300m private placement debt facility.

With the finance now in place, capital investment will continue this year on the Alexandra Basin Redevelopment Project, at Dublin Inland Port and on the redevelopment of the port’s road network to provide the capacity needed as the port grows to maximum capacity utilisation by 2040.

“While the final impacts from Brexit remain unknown, we have completed a series of projects during 2019 in conjunction with the OPW to provide the border infrastructure needed for whatever level of checks are ultimately required,” Mr O’Reilly added.

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EU/US trade talks ‘off to good start’

European Union trade commissioner Phil Hogan said his meeting with senior US officials marked a “good start” to resetting trade ties with Washington, but there was more work to do.

Hogan told reporters he had a good exchange of views with US Trade Representative Robert Lighthizer several times during his visit, and underscored Brussels’ desire to negotiate solutions for several open disputes and avoid tit-for-tat tariffs.

He said the EU was not ready to put agriculture on the table in broader trade talks, but looking at non-tariff barriers such as phyto-sanitary standards could offer some options for breaking the impasse.

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Interest rate hike in state’s home loan scheme

The Government has sharply increased the rate of interest it will charge future first-time home buyers availing of its Rebuilding Ireland Home Loan scheme.

As a result of the changes, the 25-year fixed rate has increased to 2.745% from 2%, while the 30-year fixed rate has risen to 2.995% from 2.3%.

The move means those who in future borrow the maximum amount allowed of €288,000 will pay up to €107 more per month than those who already have their loans.

The decision comes despite growing pressure on commercial lenders to reduce mortgage interest rates here, as they are among the highest in Europe.

“In an environment where interest rates are benign and we are asking banks to reduce interest rates, it seems bizarre that Government funded mortgage products are increasing rates,” said Michael Dowling, Managing Director of Dowling Financial.

The changes also coincide with moves by certain banks to lower fixed home loan rates in an effort to attract new business.

Yesterday, for example, Ulster Bank announced a reduction in its five-year fixed rate to 2.2%, the lowest rate in the market.

Introduced in February 2018, the Rebuilding Ireland Home Loan scheme is designed to help first-time buyers on lower incomes who have been refused a mortgage by a bank.

The mortgage can be used by the borrower(s) to buy a new or second hand home, or to build their own home. 

Up to 90% of the value of the property can be borrowed under the scheme, although the maximum market values have been capped at different levels depending on the location of the property.

In counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow this is €320,000 while in the rest of the country it is €250,000.

Rates are fixed and both 25-year and 30-year options are available.

As the Rebuilding Ireland Home Loan rates are fixed for the duration of the mortgage, the rate changes will only apply to new loans.

In future, a 25-year Rebuilding Ireland Home Loan mortgage of €288,000, which is the maximum loan amount available, will require repayments of €1,328 per month, €107 more than that being paid by recent borrowers.

While a 30-year mortgage worth €288,000 will cost €105 more per month that it would have under the old rates, bringing repayments to €1,213 per month. 

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Dublin Port’s trade with Europe spikes as Brexit takes toll on UK

Volumes through the country’s busiest port indicate a shift from the UK to a growing trade with the continent.

Figures from Dublin Port show volumes to Britain fell by 0.2pc last year, while volumes on services to continental Europe grew 10.7pc.

Dublin Port trade volumes hit another record in 2019.

The port, whose traffic was hit in the period by work on its docks for a major expansion project, said it expected traffic with mainland Europe to continue its strong growth.

“The effect of the deployment in recent years of new ships on direct routes to continental Europe by shipping lines such as Irish Ferries and CLdN is clear to be seen, and we expect to see this trend continue as trading patterns adapt post-Brexit,” said CEO Eamonn O’Reilly.

Overall tonnage growth for the year was just 0.4pc, due in large part to construction work on the huge Alexandra Basin development, which reduced the number of ship arrivals by 71 to 7,898. Volumes were affected when ore exports from the Tara Mine were suspended for four months due to the construction.

The traffic numbers from the port showed roll-on, roll-off shipping traffic rose 2.6pc to 1.1 million units.

Containerised shipping has now recovered to pre-crash levels and volumes grew by 6.5pc to 774,000 20-foot equivalent units, the industry standard size. “Behind these growth figures, however, we saw a marked difference between the UK and the EU-26,” said Mr O’Reilly, who noted that volumes to Britain fell by 0.2pc for roll-on, roll-off and container traffic, and that it expanded by 10.7pc for Europe.

Data from the Central Statistics Office has also shown a decline in trade with Britain, which accounts for 9pc of exports, and a rise with countries in the eurozone.

The value of exports to Britain in the first 11 months of last year fell €358m, or 3pc, to €12.45bn from the same period in 2018. By contrast, exports to the eurozone rose to €48.29bn from €45.89bn.

Exporters face another year of Brexit tension, as the UK negotiates the terms of its trade deal with the bloc, and there is the threat that it could still go for a no-deal exit on commerce.

An estimate published this week by consultancy Copenhagen Economics put the potential cost to the economy of a hard trade outcome at €18bn.

“While the final impacts from Brexit remain unknown, we have completed a series of projects during 2019 in conjunction with the OPW to provide infrastructure needed for whatever level of checks are ultimately required,” said Mr O’Reilly.

In the cruise sector, 158 ships arrived, up from 150 in 2018, with a 16.7pc surge in visitor numbers to 323,234 people.

The port is spending €277m on its Alexandra Basin redevelopment, which is due to be finished next year, and will boost capacity for large ships by deepening and lengthening 3km of its 7km of berths.

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Car sales in Europe get late-year boost helped by incentives

Europe emerged as a bright spot for the embattled global car industry after car sales jumped to a record in December, but it could be short-lived.

The “exceptional” gain in Europe last month was fuelled by a 28% increase in France and a more than doubling in Sweden, where governments changed emissions-based taxes on new cars starting in 2020, the  European Automobile Manufacturers’ Association said.

Car registrations rose 21% to 1.26 million vehicles, as the late surge helped offset a weak start to 2019 and pushed full-year sales 1.2% higher, reversing a slight drop in 2018.

Sales also more than doubled in the Netherlands ahead of an increase to 8% from 4% in the tax rate for electric company cars.

By pulling forward buying, the changes could sap demand heading into 2020.

Europe’s growth contrasts with weak demand in China where sales fell 3.6% in December. 

French carmaker PSA said global sales fell 10% last year to 3.49 million units, compared with a record 3.88 million in 2018, as it suffered from declining volumes in China, the Middle East and Africa.

In Europe, the Peugeot maker’s sales declined by 2.5% in 2019 to 3.11 million vehicles, with its Opel-Vauxhall brand suffering the steepest fall, down 6.4%.

PSA was outperformed by VW and Renault in Europe.

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Soaring gold price leads to a refining boom

In a refinery just outside Uganda’s main airport, workers slip bars of freshly refined gold into clear plastic bags sealed with a sticker of the national flag — black, yellow and red — and the label “Ugandan’s Treasure.”

Uganda produces little gold of its own. Alain Goetz, who set up the refinery, says that by branding gold from abroad as Ugandan, the operation is merely imitating others — for example, the Swiss don’t mine the gold they refine in Switzerland.

The refinery, African Gold Refinery, is part of a trend across Africa. Small-scale mining is booming, and new gold refineries are opening by the dozen, to process metal produced by informal diggers in Africa and beyond.

The refineries, which often win high-level political backing, can be positive because they offer miners and states a way to extract value from their own mineral wealth rather than just exporting raw commodities.

But if not properly controlled, they risk adding to problems of smuggling and funding conflict.

Some of Africa’s new gold refineries are in South Africa, a major gold producer with an already large refining industry. There, authorities granted 19 refining licences in the year to March 2019 — as many as in the previous three years combined.

Elsewhere in sub-Saharan Africa — where until 2012 there were only a handful of refineries — as many as 26 are now either operating or under construction across 14 countries from Mali to Tanzania, including in states which mine little gold at home, a Reuters survey found.

Governments of gold-producing countries in Africa have long complained that the precious metal in their rocks is being illegally produced and smuggled out on a vast scale, sometimes by criminal operations, often at a high human and environmental cost.

By refining gold, states hope to capture value that is being lost. “The only way to stop (smuggling) is having multiple refineries in Africa,” said Frank Mugyenyi, head of the minerals unit at the African Union.

But because informal miners already often operate through smuggling networks to avoid tax and scrutiny, officials and industry sources say some refineries risk inevitably joining these shadowy channels. With so many refineries competing for gold to process, each has scant incentive to check where its gold comes from.

Just 13 of them state they can handle more than 1,400 tonnes of gold a year, worth around $70bn (€63bn). That means they could treat around twice Africa’s estimated total gold production, and nearly a third of the world’s supply.

Of 22 refineries surveyed by Reuters, 14 did not respond to requests for more information about the size and nature of their business.

Two responses to the survey showed a lax approach: One small operator, Bupe Chipando who heads Alinani Precious Metals Ltd in Kenya, said he does not yet purify gold, but just melts blocks of impure metal together and ships them overseas. Officials said they knew of at least two other African refiners who did the same thing.

Another, Robert Baker, the CEO of Bekora Miners in Cameroon, said most of the gold his refinery processed was not declared to customs, in order to avoid paying tax on metal it exports. Cameroon’s government did not respond to requests for comment.

The Organisation for Economic Co-operation and Development (OECD) developed global sourcing standards against which it recommends refineries are audited. Outside South Africa, no African refineries have yet followed that recommendation, said Louis Marechal, an OECD expert on responsible business conduct at who has travelled widely in Africa consulting with governments and companies on how to regulate and source gold responsibly.

The new refineries offer an important outlet for millions of individuals who dig for gold using basic technology.

Industrial mining companies usually fly metal they produce in Africa to large refineries accredited by the London Bullion Market Association (LBMA), the industry’s standard setter.

All but one of these is outside the continent. Concerned about the risks of rights abuses, crime or conflict in the supply chain, LBMA-accredited refineries typically steer clear of metal from informal miners.

Six of Africa’s new refineries — in Cameroon, Kenya, Mali, Rwanda and Uganda — shared output data with Reuters.

With combined annual capacity for around 270 tonnes, they currently process around 41 tonnes of gold a year worth some $2bn. For comparison, refineries in Switzerland handle around 2,500 tonnes of gold a year, worth $120bn at current prices.

Some people in the industry concede that it is hard for Africa’s new refiners to be accepted as mainstream suppliers. Large banks, jewellers and electronics makers generally only accept gold from refineries accredited by groups such as the LBMA.

– Reuters

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Housing costs push 2019 inflation rate up to 0.9% – CSO

New Central Statistics Office figures show the rate of inflation almost doubled in 2019 compared to 2018 with housing, water, electricity, gas and other fuels showing the biggest price increases since 2015.

Consumer prices rose by 0.9% in 2019, after increasing by 0.5% in 2018 and by 0.4% in 2017. 

The CSO said that during 2019, mortgage interest repayments rose on average by 2.8% compared to a drop of 0.2% in 2018. 

Meanwhile, the price of goods decreased on average by 1.1% compared to a fall of 0.7% in 2018.

The price of services – which includes mortgage interest – rose by 2.4% compared to a rise of 1.4% the previous year.

Since 2015, the CSO said that housing, water, electricity and gas and other fuel costs have jumped by 10.8%, while prices in restaurants and hotels are up 9.8% and education costs have grown by 9.2%.

The CSO also said today that consumer prices rose by 1.3% in December from 1.1% in November.

The increase came on the back of higher rents and mortgage interest repayments as well as more expensive electricity bills.

The CSO said the biggest annual price changes in December included increases in education costs, which rose by 4.1%.

The cost of housing, water, electricity, gas and other fuels increased by 3.3% due to higher rents, mortgage rates and higher electricity bills.

Meanwhile, the price of alcohol and tobacco rose by 3.1%, while prices in restaurants and hotels grew by 2.6% on the back of increase in the cost of accommodation and more expensive prices when eating out.

Transport costs also rose mainly due to an increase in air fares and higher prices for cars and services. 

However, December saw a price fall of 8.8% in the communications sector, while clothes and footwear prices were down 1.3% due to sales. The price of some foods – including vegetables, sugar, jam, honey, chocolate & confectionery and milk, cheese and eggs – were also lower last month.

On a monthly basis, the CSO said that consumer prices rose by 0.2% in December on the back of increases in the price of transport and health.

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