This morning, Ireland’s Central Statistics Office (CSO) has released its inflation figures for April 2013. The monthly headline Consumer Price Index (CPI) was flat in April 2013 compared to the previous month, and is still only up a modest 0.5% year-on-year. April’s results mirror those of Sept 2012-March 2013 and continue a subdued annual inflation trend seen in recent months compared with the 2%+ that pertained before January 2011.
Housing has stopped being the biggest driver of annual inflation, mostly because mortgage costs have been declining – by 6.8% in the past year, as ECB rate cuts and greater scrutiny of variable mortgage interest rates take effect. Just a few months ago, mortgage interest was rising by 20% per annum, and as mortgage interest costs account for over 5% of the basket which measures inflation, the impact on inflation was substantial.
Energy costs in homes on the other hand, which account for over 5% of the total basket examined by the CSO, have risen by 4.4% in the past 12 months, mostly driven by the 9% price hikes at the ESB, and in October 2012 at Bord Gais.
Elsewhere, private rents rose by a stonking 1.0% for the second month in a row – this after modest increases in February and January but bigger increases in previous months: 0.7% in December, 0.6% in November, 0.7% in October and 0.9% in September 2012. Over the past year, such rents are up by 5.0% according to the CSO – there is some small rounding in the figures above which show 5.4%. The results today are supported by the PRTB index launched yesterday which shows actual rents nationally up by 2% in the past year, and the Daft.ie asking rent index which suggests rents are up nearly 3%. There are no doubt regional and property-type variations, yesterday’s results from the PRTB suggested rents on apartments in Dublin were still declining but houses were increasing.
It seems that in our financial crisis, the big correction in rent took place in 2009 with a 19% maximum decline, compared to a decline of just 1.4% for all of 2010. Since the start of 2011 there has been a 9.3% increase (mostly recorded in February and October 2011 and February and September/October/November 2012 and March/April 2013).
Rent assistance levels have not been affected by the recent Budget 2013, neither the rates nor contribution have changed.