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What’s the problem with extending the country quarantine list?

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The mandatory hotel quarantine system has been in operation for more than a week but continues to cause tensions in Government. What is going on?

The Department of Foreign Affairs and others reacted angrily when an expert travel advisory group recommended that 43 countries, including the US, France, Germany and 15 other EU countries, be added to 33 countries already on the mandatory hotel quarantine list.

The leaking of the list drafted by public health officials, prior to consultations between Ministers and departments, led to a “frosty” meeting between Minister for Health Stephen Donnelly and Minister for Foreign Affairs Simon Coveney.

Fault lines were drawn between public health concerns and the need to take sweeping measures to keep Covid-19 variants out of the country – as pushed by Donnelly – and the political, diplomatic, legal, business and operational issues – as pushed by Coveney and Tánaiste Leo Varadkar – around imposing the 12-day quarantine on visitors from major EU countries and the US.

A short-term compromise was reached with 26 non-EU countries and states being added, but Donnelly is still pushing for it to cover more countries.

What is at issue?

The aim of the quarantine system is to protect against Covid-19 variants as the country seeks to prevent a fourth wave of the disease and allow some easing of public health restrictions while vaccines are rolled out.

Coveney and others have questioned Donnelly and his officials about whether the means are legal, proportionate and practicable given the numbers of travellers, including Irish people, involved.

What could the legal problems be?

Attorney General Paul Gallagher raised concerns that the correct process under the quarantine legislation had not been followed. Given the freedom of movement rules within the EU, he also asked whether the State could force people arriving from EU countries to quarantine, but it was pointed out that Austria, an EU country, was already on the list and no issue was raised.

He also raised concerns about whether it would be legal to force EU and Irish citizens to pay for quarantine under freedom of movement rules. Health officials have argued that Irish people could bring back variants from visits overseas too and the legislation clearly covers them.

How could the measures be disproportionate?

Department of Foreign Affairs officials have questioned whether the proposed list goes too far when the aim was to stop variants of concern, but health officials said there are now heightened risks in EU states, including from a variant in France that appears undetectable by the PCR test.

What are the practical problems?

The contract with hotel operator Tifco offers 650 rooms with a capacity to increase this to 2,500 rooms. But Coveney and Varadkar have raised concerns about the massive influx of travellers who would be subject to quarantine if EU countries and the US were added to the list.

How could these issues be overcome?

Extra hotel rooms could be sought under a new contract. A more radical proposal could involve applying a cap on arrivals, as Australia has imposed, though this is seen as a last resort given how politically unrealistic it would be to sell to a country with a large diaspora.

So how will matters be resolved?

This is hard to say given the divisions and tensions in Government. At the heart of this dispute is the fact that the quarantine system was set up without being fully thought through and with the Department of Health unusually being charged with its operation.

One source said some in Government were never really enthusiastic about the quarantine system, seeing it as an act of populist appeasement. Health officials, on the other hand, see it as a key public health measure to stop variants entering the State that could undermine the vaccination programme.

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BNP Paribas REIM acquires Barcelona office building (ES)

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BNP Paribas REIM acquires the iconic office building “Tanger 66” located on 66 Calle Tanger, in the 22@ District in Barcelona, from Blue Coast Capital. This asset is an emblematic building and an architectural landmark in Barcelona, with a total surface area of 7,211m². It is strategically located in the 22@ District, which is one of the most sought-after office area in Barcelona and a European hotspot. The District 22@ is a neighbourhood that used to house industrial sites before becoming one of the most important urban renewal projects in Europe and being rehabilitated to provide modern and elegant offices designed to meet the needs of businesses. The neighbourhood is now composed of more than 1,500 companies specialised in IT, energy, design, media or scientific research and is considered today as a space for constant innovation.

 

The “Tanger 66” building was re-developed from a textile factory into the first LEED Platinum office in Barcelona by Blue Coast Capital. It is composed of 4 floors and an 800m² terrace garden in the upper floor. It offers modern working spaces with training areas, collaborative spaces, computer laboratories, an auditorium and a cafeteria. The building benefits from an excellent connection to public transportation with metro, tram, bus and train stations only a few minutes away. It is fully let to Hewlett Packard.

 

Jean-Maxime Jouis, Global Head of Fund Management for BNP Paribas REIM commented: “This acquisition strengthens the BNP Paribas Diversipierre fund portfolio and fits perfectly with the fund’s strategy by adding a modern asset, fully let and located in a strategic location in Barcelona. In addition, the building is certified LEED Platinum, therefore it respects the funds’ commitments and more generally the environmental issues targeted by BNP Paribas REIM, whose strategy is to accelerate its funds’ goals in terms of ESG.”

 

Fraser Denton, Managing Director, European Real Estate for Blue Coast Capital said: “I am delighted for BNP Paribas REIM in finalising this transaction. Our re-development of T66 is an excellent example of Blue Coast Capital’s focus on creating exceptional real estate and is a leading example of real estate repurposing whilst achieving the highest level of LEED Certification.”

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House prices shot up £25k in a year in November 2021, ONS says

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Property prices surged 10 per cent annually in November 2021, according to the latest official figures.

This marked a small increase in price inflation compared to October, when prices grew by 9.8 per cent, the Office for National Statistics’ house price index shows.

The average house price was £271,000 in November 2021, which is £25,000 higher than the same time last year.

Climbing: The average UK house price increased by £25,000 in the year to November 2021

Climbing: The average UK house price increased by £25,000 in the year to November 2021

The figures confirm that house prices continued to climb, even after the stamp duty holiday finished at the end of September 2021.

The tax break, which lowered home buyers’ bills by up to £15,000, contributed to rapidly rising prices after it was introduced in July 2020.

This was despite the cost of a home increasing by £10,000 more than the maximum tax break.  

The number of housing transactions taking place also increased in November, growing by nearly a quarter compared October according to HMRC.

However, it was 16.4 per cent lower than the number of transactions in November 2020.

This suggests that the slight dip in October following the end of the stamp duty holiday may have been a temporary blip.

Rise: The rate of house price growth ticked up in November compared to October

Rise: The rate of house price growth ticked up in November compared to October

The average UK house price has increased dramatically since the pandemic started

The average UK house price has increased dramatically since the pandemic started

Phillip Stevens, director of Richmond estate agency Antony Roberts, said: ‘It was business as usual in November as property prices rose again following October’s dip, which came about following the end of the stamp duty holiday. 

‘There is plenty of evidence that buyer demand remains strong, especially for houses, and with relatively little stock available it is a house seller’s market.’

However, experts said that the spectre of rising inflation and increases in the cost of living could serve to dampen the housing market later in 2022.

On the market: This four-bed, three-bath detached home in Kirkby Lonsdale, Lancashire, is on the market with Hackney & Leigh with an asking price of £745,000

On the market: This four-bed, three-bath detached home in Kirkby Lonsdale, Lancashire, is on the market with Hackney & Leigh with an asking price of £745,000

In Trowbridge, Wiltshire, this five-bed is listed for £610,000 with agents Kingstons

In Trowbridge, Wiltshire, this five-bed is listed for £610,000 with agents Kingstons

Buyers in Largs, North Ayrshire, Scotland can snap up this four-bed, two bath detached home for £299,000. It is listed with estate agents at Corum

Buyers in Largs, North Ayrshire, Scotland can snap up this four-bed, two bath detached home for £299,000. It is listed with estate agents at Corum

This Victorian three-bed is marketed with Starkings & Watson in Norwich for £375,000

This Victorian three-bed is marketed with Starkings & Watson in Norwich for £375,000

This two-bed cottage near Hereford is being sold by Chancellors with a £210,000 guide

This two-bed cottage near Hereford is being sold by Chancellors with a £210,000 guide

This depends to some extent on whether there are further increases in the Bank of England’s base rate, which would likely push up the cost of a mortgage.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘There is further speculation that the Bank of England will raise interest rates by 0.5 per cent at its February meeting in order to counter rising inflation, and it remains to be seen what impact this will have on buyer confidence.

‘Squeezed affordability would be an issue, preventing first-time buyers in particular from getting on the ladder.’

Looking at the different countries of the UK, house prices increased 9.8 per cent over the year in England to reach an average of £288,000.

In Wales they grew by 12.1% per cent to £200,000, in Scotland by 11.4 per cent to £183,000 and in Northern Ireland by 10.7 per cent to £159,000.

The South West was the region with the highest annual house price growth, with average prices increasing by 12.9 per cent in the year to November 2021. This was up from 10.8 per cent in October 2021.

The lowest annual house price growth was in London, where average prices increased by 5.1 per cent over the year to November 2021, down from 6.7% in October 2021.

Despite being the region with the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK at an average of £520,000.

Locations: Regionally, the South West saw the highest house price increases at 12.9%

Locations: Regionally, the South West saw the highest house price increases at 12.9% 

The North East continued to have the lowest average house price at £149,000, but prices still increased 8.7 per cent in the year to November.

The fact that the number of homes on the market is much lower than the number of interested buyers is another factor continuing to drive up prices, along with Britons’ desire to change their living arrangements due to the pandemic.

Nick Leeming, chairman at estate agent Jackson-Stops said: ‘Last year proved to be an astonishing year for the property market, with prices and demand defying expectations set by the pandemic in January. 

‘Whilst today we see average house prices up slightly from those recorded in October, the figures still reflect lack of supply in the market and are therefore impacting levels of demand in the year to November 2021.

‘It is evident that this imbalance between stock and demand will continue to underpin housing activity in coming months. 

‘This is reflected by what we are seeing across our branches where the complex and ongoing changes to the nation’s working patterns and lifestyle aspirations have only heightened the importance Britons place on owning a home.’

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Spectre of inflation returns to haunt Irish households

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Irish households are facing the biggest cost-of-living squeeze in decades and it’s likely to get worse before it gets better. Inflation here is now running at 5.5 per cent, its highest level since April, 2001.

Almost everything is more expensive than it was a year ago: energy, accommodation, food, travel, insurance. Energy bills alone are expected to rise by up to €1,300 this year.

This will have a corrosive effect on household budgets. Rising prices hit poorer households harder as they spend more of their income on necessities. If that wasn’t bad enough, house prices, the perennial bugbear of the Irish economy, are steamrolling forward again, rising an annual rate of 14 per cent. Make no mistake, 2022 is going to bite financially.

The irony is that the global surge in inflation is partly the unintended consequence of two very positive developments; government supports and vaccines.

The rollout of financial supports to shore up workers and households affected by the crisis has facilitated a quicker than expected rebound in demand for goods and services, which has in turn triggered price hikes across the economy.

The rapid development and rollout of vaccines (at least in rich countries) has accelerated this rebound.

Another, perhaps less positive, reason for the current surge in prices relates to the globalisation and complex international supply chains that underpin modern production processes.

Since the 1990s businesses have been sourcing parts in cheaper and cheaper destinations – often on the other side of the world – in a bid to keep prices down; in effect exporting inflation that might have occurred in a less liberalised economy. This has come back to bite us hard with shipping and other supply routes now clogged and subject to long delays.

The traditional remedy for inflation, interest rates, are no longer within the Government’s gift and the European Central Bank has pledged not to lift them this year for fear such a move will damage recovery. The more reactive US Federal Reserve is expected to adopt three rate hikes this year alone.

In any case, rate hikes take 18 months to two years to work, meaning they would have little impact on the immediate price environment. They also only temper demand and therefore would have no role in cooling inflation emanating from supply chain disruption.

That leaves fiscal policy. Measures such as VAT reductions or energy credits – the Government here is planning a €100 credit to help offset the cost of energy bills – are being considered but they’re unlikely to make much of dent, particularly if energy bills are rising by as much as €1,300.

Coronavirus unwind

And remember government budgets are out of whack because of the huge outlay on wage supports, meaning there is considerably less room for manoeuvre.

The biggest fear for governments is that the current price surge becomes ingrained in system and is longer a “transitory” manifestation of the coronavirus unwind.

One way this could happen is through wages. If wages start rising as workers demand better compensation for the current cost-of-living squeeze that can create a wage-price spiral, leading to a more prolonged period of price growth.

Wage growth in the Irish economy is running at about 4 per cent but there are compositional problems with this measurement as thousands of workers in consumer-facing sectors such as hospitality are not working, skewing the headline number.

Inflation can also be self-perpetuating: if people believe prices are going to go up, they’ll buy now, pushing up demand and prices. Either way, the current surge in inflation is likely to raise the political temperature here with the Government facing calls from the opposition to do something to offset the increase while at the same time trying to rein in coronavirus-strained budgets.


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