Rents hit a new high but growth slows

20th August 2007, Daft.ie, Ireland's largest property website, today released the latest Daft Rental Report. The report shows that average rents across the country hit a new all-time-high in June 2007. The average rent nationwide now stands at €1,372, just over €100 or 9% more than this time last year. While a growth rate of 9% is still well above the average rate of inflation in the wider economy, the rate of growth in rents is slowing down. At the time of the last rental report 3 months ago, the rate of rental inflation was 11.9%

In most areas in Dublin, rents now are between 8% and 12% higher now than 12 months ago. In Dublin's commuter towns, though, rents now - at just over €1,100 on average - are more or less the same as this time last year. While larger properties, including three and four-bedroom properties have seen their rents go up, rents have fallen for smaller properties in Dublin's commuter towns, especially one-bedroom properties. Commenting on these figures, Ronan Lyons, economist at Daft, "This indicates both an excess of supply generally in these areas and - more importantly - better value substitutes, either cheaper properties further out or properties at the same price closer to town. The fact that this is only happening in Dublin's commuter towns, and is not more widespread, more than likely says more about relative shifts in supply than an overall weakness in the market."

Rent inflation in Ireland's other cities have also cooled, most noticeably in Limerick where inflation has fallen from 12.3% earlier this year to 7.3% in July. The average rent in the town now stands at €885. In Cork, which like Limerick had double-digit inflation earlier in the year, inflation has fallen but only slightly, and remains at 10.1%. The average rent in the city is just over €1,150. The average rent in Galway is now above €1,000, while rent inflation currently stands at 8.3%, a slight fall compared to the rate of inflation in early 2007. In Waterford, where inflation had been lowest among the cities, rents are now almost static in year-on-year terms. The average rent in Waterford city is now €805, just 2.3% more than at this point last year. Outside the major urban areas, inflation in rents now stands at between 6% and 8% on average.

Relating current developments in the rental market to the fortunes of Ireland's property markets more generally, Ronan Lyons said: "Overall, rental inflation looks to have peaked - and more than likely, so have rents, as the bounds of tenants' ability to pay have been reached. With interest rates back at normal levels, demand has contracted and people are looking very closely at what they can afford. With housing completions at record levels and more second-hand properties for sale now on Daft than ever before, there has never been greater competition among sellers for buyers' attention. Therefore, static house prices are to be expected and, given rates of inflation generally, falls in real house prices are on the cards for 2007 and possibly 2008. In the long run, though, this is perfectly normal behaviour, as the market looks to correct the yield."

The latest Daft Report also shows first-time-buyers how they can buy a three-bedroom property in Dublin for €1,000 per month. The mortgage on a typical three-bedroom property in West Dublin is €1,460 per month after claiming mortgage interest relief. Taking away the income generated from renting a double-room - €451 per month, this leaves new owners with a monthly cost for buying the property of €1009. The average rent for such a property in West Dublin currently stands at €1,297.

A full copy of the report is available online at www.daft.ie/report and includes a full commentary from Ronan Lyons, Economist at Daft.ie.

Ends

For further information please contact:
Odhran Ginnity, Daft.ie, 01 421 8700

Notes to the Editor
Daft is Ireland's biggest property website with the largest selection of residential property for sale, commercial property and residential lettings in Ireland. In March 2007, a report by the Audit Bureau of Circulation (ABC) confirmed that Daft.ie was Ireland's busiest website with requests for over 53.8 million pages of information received (Page Impressions) in March 2007, ahead of Ireland's next busiest websites including: RTE.ie (43.4m, May '07), Carzone.ie (34.9m, January '07), MyHome.ie (26.4m, September '06) and Eircom.net (23.9m, October '06).

About the Daft Rental Report
The Daft Rental Report is based on an analysis of the 350,000 rental properties advertised on Daft.ie since January 2002, including 22,000 posted since February 2007. This figure represents the bulk of the available properties to let in the country and therefore gives the most accurate and timely reflection of what is happening in the Irish rental market. Figures are calculated from econometric regressions using standard methods.