Author: db

ARC ERM Launch Event 28th February 2019

Craske: ” I don’t think anybody at the moment is suggesting a wholesale change in the way anybody does their modelling. We are not there yet.”

Mee: “I guess this is the first stage of the research and I think you [Tunaru] propose some interesting further work“.

Kenny: ” I would say what hasn’t come out of the paper is what the difference between those two approaches [Risk Neutral and Real World] is, and that’s something the working party wants to look at, to say .. what is the difference between the two approaches, and then have that policy debate”

Craske “the paper comes out with some relatively low volatilities that we are not used to seeing, and I think there needs to be more work done around that, around the sort of, single house price, dilapidation, old people living in there. That hasn’t really been factored in at all … this paper’s really good to get this discussion out, and I do urge you all to keep an open mind when you look at it, because we don’t always – sometimes we’ve got a very narrow way of thinking, but I do think that there’s more to go, and this may go on for longer than the Brexit discussions.”

What are they telling us?

We shall be publishing a near complete transcript of the 28 February Staple Inn ERM presentation shortly. Meanwhile, here is Malcolm Kemp on the (to us strange)¹ idea that we divide the net rental yield by 5 in order to get the deferment rate used for the Tunaru model.

Continue reading “Sitting tenant”

We are still poring over the infamous paper published by the Institute on Friday, and hope to be back on air by mid week. Meanwhile, our chum Andrew Smith, the internationally renowned actuary now teaching at UCD, popped something in the post.

He is equally perplexed by the paper’s argument that since only 20% of the market is rented, therefore the rental yield on the market as a whole is a fifth of the yield on rented properties.  ‘I can’t see any perspective from which this makes sense’. Quite.

Another of our friends was more blunt. ‘I hadn’t realised that the bank account that gives me 1% was actually only 0.001% because only 4000 people have that account’.

I am sure it will become clear in the end.