Category: Social conditions

Q4 2013 Mortgage Arrears Statistics

The Central Bank have released the Q4 2013 update of their mortgage arrears statistics. 

For Primary Dwelling Houses (PDHs), 12.6 per cent of accounts are in arrears of 90 days or more.  This compares to 11.4 per cent of accounts in similar arrears in the unaudited monthly data for December published by the Department of Finance. 

The Department of Finance figures cover the six banks operating under the Mortgage Arrears Resolution Targets (MART) process.  These banks (ACC, AIB, BOI, KBC, PTSB, ULSTER) provide 90 per cent of mortgage lending in Ireland so it is clear that the remaining 10 per cent of mortgages (from the former BOSI and INBS as well as the various sub-prime lenders) have a far higher arrears rate – somewhere around 23.5 per cent.  The 90-day arrears rates for the INBS and subprime mortgages are greater than 50 per cent.

In today’s Central Bank statistics we see the total number of PDH accounts in arrears continue to fall and for the first time there was a decline in the number of accounts 90 days or more in arrears. 

However, the situation of those in existing arrears continues to deteriorate with yet another significant increase in the number of accounts now 720 days or more in arrears (31,834 to 33,589). 

On average the accounts greater than 720 days in arrears are just under €42,000 in arrears.  Across the statistics there is an average of roughly 1.25 accounts per household.

The outstanding balance on mortgages in arrears fell from  €25.6 billion to €24.4 billion of which €18.2 billion are in arrears of 90 days or more.  The total amount of arrears rose from €2.17 billion to €2.24 billion.

The total amount of PDH mortgage debt continues to fall and is now at €107.4 billion, compared to €118.6 billion when the series began in September 2009.  However, it should be noted that the release mentions “asset sales” that took place over the quarter but it is not clear what impact these have on the figures.  The sales refer to mortgages that were sold by one of the reporting institutions, and are therefore no longer included in the statistics.

At the of December there were 84,053 restructured PDH accounts and 79.3 per cent were deemed to be meeting the conditions of the restructure.  There is a new table providing these rates by each type of restructure.

Reduced payment less than interest only (4,264) and arrears capitalisation (18,516 accounts) are the worst performing restructures for PDH accounts.  There were only 14 accounts granted a permanent interest rate reduction.

As expected the number of split mortgages continues to grow rapidly.  It increased from 1,154 in Q3 to 3,268 in Q4 and, with 96.3 per cent compliance, it is the best performing restructure for PDHs.  This is likely linked to the incentives built in to the restructure.  There are likely to be many more split mortgages coming through as there are 9,722 restructured accounts classed as “Other” most of which are “accounts that have been offered a long-term solution, pending the completion of six months of successful payment.”

There were 63 forced repossession in the quarter and 105 voluntary surrenders.

Court proceedings were initiated in 1,491 cases.  Up to Q2 2013 the average number of proceedings issued per quarter was around 250.  This increased massively in the second half of 2013.  During Q4, 258 court proceedings were concluded and 82 court orders for repossession were granted.  Of the 176 concluded by other means it is  probable that many of these see the borrower and lender enter a new arrangement through a restructuring of the original loan agreement with others ending by way of voluntary surrender/abandonment.

Data on the Buy-to-Let sector are also included in both releases.

ESRI Studies on Taxes and Transfers

Here are links to two studies released through the ESRI this week.  One chart is taken from each but there is much more detail in both particularly the second.

Distributional Impact of Tax, Welfare and Public Service Pay Policies: Budget 2014 and Budgets 2009-2014

   

Social Transfers and Poverty Alleviation in Ireland

Suicide and the Recession – again

Seán Ó Riain’s post and links to the recent British Medical Journal article on suicide and unemployment call for an extended comment, although, as Brian Lucey points out, the topic was discussed in a recent post.

The estimates of the number of suicides attributable to the recession in the BMJ article are based on the trend in suicide rates over the eight years 2000 to 2007 pooled over 54 countries compared with the rates recorded in the years 2008, 2009, and 2010. The discrepancies between the actual and extrapolated rates were used to infer the impact of unemployment: The authors summarize their approach as follows:

To examine whether suicide rates rose more in countries with worse economic downturns, we used Spearman’s correlation coefficients to investigate the association between suicide rate ratios in 2009 and percentage point changes in unemployment rates between 2007 (the baseline year) and 2009 (unemployment rates (in %) in 2009 minus unemployment rates (in %) in 2007 across study countries.

As may be seen from Figure 1 the Irish suicide rate hardly changed between 2007 and 2010 – rising from 10.5 to 10.9  When deaths “due to external causes of undetermined intent” (a category generally viewed as referring predominantly to suicides) are included, the rate actually fell from 13.2 in 2007 to 12.7 in 2010. Looking beyond 2010, using preliminary data based on year of registration, both measures of suicide were stable in 2011 and 2012.

Taking a long-run perspective, the econometric evidence contained in Walsh and Walsh, 2011 shows that the Irish suicide rate has been only weakly correlated with the unemployment rate. Other factors seem to have been at work.  For example, the suicide rate rose sharply during the period of falling unemployment in the second half of the 1990s, which coincided with a surge in per capita alcohol consumption. The suicide rate declined during the first half of the noughties – particularly among younger males – coinciding with the start of a steady decline in alcohol consumption.

The following Figure shows the suicide and unemployment rates since the 1960s and brings out the lack of correlation between them. In particular, the recent surge in unemployment seems to have had a surprisingly weak impact on the suicide rate.
While it might be claimed – as is done in the BMJ article – that had unemployment not risen, the suicide rate would have fallen below its present level, but extending the earlier econometric work down to 2012 suggests that the influence of the unemployment rate on suicides has remained relatively weak and confined to males aged 35-54. These age groups account for about 30% of all suicides. Suicide among males in other age groups and among females, which account for 70% of the total, do not appear to be significantly influenced by the unemployment rate.

We must be careful not to attribute too much of our current suicide problem to the downturn in the economy and / or the measures that have been taken to correct our fiscal imbalances.

Thematic Report on the Elderly from the EU-SILC

The CSO release is here.

Brendan and Dermot Walsh on health and austerity

Dermot and Brendan Walsh have just published a provocative comment in the British Medical Journal on the link between health and austerity  [http://www.bmj.com/content/346/bmj.f4140/rr/651853].

Momentary relief from the deliberations on Anglo!

The comment reads:

Ireland is – after Greece – the country where the post 2008 structural adjustment programme, aka austerity, has been proportionately most severe. Yet there are few indications that this has had a significant adverse effect on basis health indicators.

The crude death rate in 2012 was 6.3 per 1,000 compared with 6.4 in pre-austerity 2007. The suicide rate in 2012 was 12.8 per 100, 000 in 2012 compared with 13.2 in 2007. Admission rates for depressive disorders fell to 117 per 100, 000 in 2012 from 138 in 2007. The percentage distribution of self-assessed health status did not change between 2007 and 2010 (the latest available year).

Overall there is a striking lack of evidence that the major austerity programme implementd since 2007, and the concomitant trebling of the inemployment rate, has had a significant deleterious effect on the health of the Irish population. This evidence needs to be given due weight in international assessments of the impact of economic policies on public health.