Rents hit a new high as supply falls

13th June 2007, Daft.ie, Ireland's busiest property website, today released the latest Daft Rental Report. The report shows that over the last year, rents have increased by 11.9%. Rent Inflation is now at its highest level since the Daft Report was started in 2002. The average rent nationwide now stands at €1,382, approximately €150 more than this time last year.

Over the last year, the supply of properties available for renting has fallen by about 20%. The fall in supply may represent some investors selling their properties and leaving the Irish rental market. On top of this, many people who have been priced out of the residential sales market are staying in their present rented accommodation. This is affecting supply, as it reduces the number of properties becoming available for rent. At the same time, demand is at an all-time high due to the demographic bulge of people at renting age and high levels of immigration.

In Dublin, rents are up by 12% on average. Areas closest to the city centre have seen greater increases in rents than more outlying suburbs. Rents in Dublin 1 and Dublin 2 have increased by up to 20% in the past year. This compares with growth of less than 10% in areas such as Dublin 24 and North County Dublin. The largest increases in rents have been for four and five-bedroom properties in South Dublin, where rents have increased by up to 50% in the last year.

Rents in Cork and Limerick cities have performed stronger than Dublin, increasing by around 14% over the past year. Growth has been somewhat slower in Galway and Waterford cities, where rents have typically risen by about 6.5%. In the Dublin commuter counties (Louth, Meath, Kildare and Wicklow), average rents are up 7.4%, while in South-East Leinster (Kilkenny, Wexford and Carlow), rents have increased 6.5%. Although rents are increasing nationally, in certain market segments, rents are close to static. Outside the major urban areas, rents have increased by no more than 3% on average during the past year.

Commenting on the report, Brian Fallon, Director, Daft.ie, said "With many people no longer able to afford to buy their own place, people are now extending their leases and staying in rented accommodation. As a result, rents are being forced upwards as there is more competition for fewer places to rent."

Fintan McNamara, CEO of the Institute of Professional Auctioneers and Valuers (IPAV), contrasted the current climate in the rental market with the period between 2001 and 2004, when rents fell by up to 20%. "Falls at the time were due to the increase in supply of rented accommodation following the introduction of various section-type reliefs such as the expansion of Section 50 relief for student accommodation and the introduction of the Rent-a-Room scheme, as well as the prevailing low interest rates," Mr McNamara commented. "The surge in rents in the last two and half years is in no small way due to strong demand arising from significantly increased immigration following EU expansion. Furthermore, the eight increases in interest rates since December 2005 have undoubtedly contributed to higher rents."

The latest Daft Report also shows how a first-time-buyer could buy a three-bedroom property in Dublin for approximately €1,000 per month. The mortgage on a typical three-bedroom property in West Dublin is €1,455 per month (after claiming mortgage interest relief). Taking away the income generated from renting a double-room (which is €446 per month) leaves a total monthly cost for buying the property of €1009. The average rent for such a property in West Dublin currently stands at €1,499.

A full copy of the report is available online at www.daft.ie/report and includes a full commentary from Fintan McNamara, Chief Executive of the Institute of Professional Auctioneers and Valuers.

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For further information please contact:
Jennifer Mooney, Marketing Solutions, 053 26789, 087 833 6450
- or -
Angela Costello, 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, well ahead of Ireland's next busiest sites including: Carzone.ie (34.9m, January '07), MyHome.ie (26.4m, September '06), Eircom.net (23.9m, October '06) and RTE.ie (23.1m, 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.