Latest Dublin Economic Monitor

Latest edition of Dublin Economic Monitor finds Dublin’s economy continues to thrive, but housing market pressures continue to be felt

  • Average monthly rent in Dublin in excess of €1,500 since Q4 2017
  • Housing prices now close to 95% higher than their trough in early 2012
  • Consumer sentiment weakened in Q3 as concerns about Brexit weigh on confidence

Dublin remains a hive for economic activity, with unemployment falling and consumer spending continuing to grow year on year according to the latest Dublin Economic Monitor, published today. However, the 15th edition of the report also finds that the city is showing the symptoms of this overcapacity with the cost of residential housing at an all-time high, which may be impacting upon the ability of employers to attract talent from overseas. Furthermore, Brexit concerns are starting to weigh on consumers’ confidence in the economy. 

The report, produced by EY-DKM Economic Advisory on behalf of Dublin City Council, looks at a range of economic indicators driving the city’s growth, including employment, property and rental prices, housing commencements, hotel rates and public transport use, to determine its economic performance from the height of the boom to the economic crash and subsequent recovery.

Key findings from the Dublin Economic Monitor include:

  • The average monthly residential rent in Dublin now stands at €1,587, €128 higher than 12 months ago, and the greatest annual increase in value since the Dublin Economic Monitor began in Q3 2007. Similar pressures are recorded in the Greater Dublin Area (GDA) and nationally (excl. GDA and Dublin), registering 5.6% and 6.4% growth YoY respectively.
  • Residential property prices continue to moderate, registering 6.1% YoY growth in August. This compares to YoY growth of 11% three months previous. Despite the moderation in price growth, Dublin house prices are now at their highest level since the end of 2008 and are close to 95% higher than their trough in early 2012
  • Housing commencements remain volatile with 1,950 new commencements recorded in Q2 2018. While this represents an 11.2% YoY decline, the level of commencements is now at its highest since the series began in Q1 2011. Housing completions are up 42.6% YoY in Q2 with 1,804 new properties added to the capital’s stock.
  • Dublin has retained its top position in the annual European Buy-to-Let League Table from WorldFirst. This is the third year that Dublin has been identified as the most attractive destination for buy-to-let investors.
  • The unemployment rate in Dublin now stands at 5.2% (seasonally adjusted) with 11,300 additional people becoming employed in the three months to Q2 2018. Unemployment in Dublin was last this low in Q1 2008.
  • CBREs EMEA Tech Cities Index has ranked Dublin in 3rd position due to the scale of large and small tech companies looking to secure accommodation in the city. Over 40% of all office take-up in Dublin in the first half of 2018 was by tech occupiers looking to expand existing operations.
  • Public transport trips on the LUAS exceeded 10 million (seasonally adjusted) in Q2 2018, the second full quarter in which the LUAS Cross City was operational. This is the first time passenger numbers have surpassed 10 million and represents a 50% increase in passenger trips in just over eight years.

The Mastercard Dublin SpendingPulse indicates that overall growth in consumer expenditure in Q3 2018 grew by 4.3% YoY (seasonally adjusted). Furthermore, spend on entertainment was particularly strong, with YoY growth of 11.7% in Dublin. The tourism sector has also seen a boost from UK tourists, with two consecutive quarters of positive YoY growth following five consecutive quarters of negative growth after the Brexit vote.

This issue of the Dublin Economic Monitor contains a special article from John Fitzgerald looking at the impact of Climate Change on the economy of the Dublin Region and the steps which need to be taken to address this challenge. There is also an Article from Paul Reid, Chief Executive of Fingal County Council on the future of skills for the county and which sectors will be driving this demand.    

Commenting on the report, Ciara Morley, Senior Consultant at EY-DKM Economic Advisory said: “Without doubt the overall outlook for Dublin remains broadly positive, though housing continues to present the greatest challenge for the city. Both average rents and house prices are in excess of levels recorded some 10 years ago, and with both housing completions and commencements coming off such a low base, it will be some time before we see these pressures alleviated. This coupled with the fact that the unemployment rate in the city is currently at its lowest level since 2008, and edging towards full employment, means that firms may find talent attraction a growing challenge in the years ahead.”

Austin Hughes, Chief Economist at KBC Bank Ireland said: “Dublin consumer sentiment weakened again in the third quarter as concerns about household finances combined with increased worries about Brexit to weigh on confidence. My sense is that high profile increases in living costs in areas such as housing and energy coupled with greater uncertainty about the future has prompted a more cautious attitude among Dublin consumers of late.

Michael McNamara, Global Head of SpendingPulse, Mastercard said: “The autumn Mastercard SpendingPulse shows positive Q3 YoY growth both for Ireland at 3.2% and Dublin at 4.3%. This is in line with the UK but slightly under the US (at 5%). Irish growth has been driven by some impressive sector performance in both Entertainment and Household goods. The Entertainment sector grew the strongest at 8% for Ireland and 1.7% for Dublin – its highest growth since Q2 2016. Tourism is another strong sector with 10.6% YoY growth at the national level and over 13% in Dublin – influenced by increasing numbers form the US, Germany, France and China.”

Andrew Harker, Associate Director at IHS Markit said: “Although growth in the Dublin private sector lost some momentum in the third quarter, rates of expansion in output and new orders remained strong and any easing is of little concern at present. Indeed, companies upped their rate of job creation, suggesting they remain confident in the near-term outlook at least. Gains in new business, output and employment also continued apace across the Rest of Ireland as conditions across the economy as a whole remain buoyant.” 

The Dublin Economic Monitor is a joint initiative of the four Dublin local authorities, produced by EY-DKM Economic Advisory. The report focuses on the Dublin region, and tracks key economic indicators including the Mastercard Dublin SpendingPulse, capturing data from the height of the boom to the economic crash and the subsequent recovery. 

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