Good afternoon, it is January 15th 2021 and here is your economic and market update from BlackBee.
- Irish mortgage customers paying more on average than their Euro Area counterparts.
- New plans on remote working to be announced by the government today.
According to the latest Central Bank data, Irish home buyers are still paying more for basic mortgage products than their European counterparts. The average rate on new mortgages in the euro area averaged 1.31% whereas the average rate on new mortgages in Ireland stood at 2.79%, over double the euro area average. If we take a €300,000 mortgage over 30 years as an example, the difference costs Irish consumers roughly €80,000 more over the lifetime of the mortgage. The volume of mortgage agreements reached €822 million in November, up 10% month on month and up 1% year on year. In the three months to November, 80% of all new agreements including renegotiations were fixed-rate mortgages. In 2014 fixed-rate mortgages accounted for only 10% of all mortgages showing the sharp increase in demand for fixed-rate loans. Due to the ultra-low interest rate environment, some lenders are even pricing fixed-rate loans lower than variable loans. Typically fixed-rate loans are higher than variable rates as the premium reflects the certainty guaranteed to the borrower. (Source: Irish Times, CBI).
Under new plans being announced by the government today, people will have the legal right to request their employer to allow them to work from home in the future. The government proposed that working from home should be the new norm for potentially 20% of public service staff although they accepted this is an average figure and could pose challenges in frontline areas. The measure is part of a new strategy that the Tánaiste and Minister for Enterprise Leo Varadkar will publish on remote working. To facilitate more people working remotely, the government is also exploring how to accelerate the national broadband plan and also remote working hubs that are close to childcare facilities. The treatment of remote working will also be considered in terms of tax and expenditure in the next budget. (Source: Irish Times). In the National Remote Working Employee survey released in October 2020, the report found that 94% of workers would like to work from home some or all of the time, however only 27% said they would want to work the full working week from home. This survey showed that although remote working is desired by employees, 73% of workers still would like to be in the office for some of the working week therefore office space is still required. (Source: RTE).
Best & Worst Performers of Large Cap US Stocks on Thursday
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Global Market Update
(as at close of markets 14/01/2021)