Rents are rising, house prices are falling.

27th November 2007, Daft.ie, Ireland's largest property website, today released the latest Daft Rental Report. The report shows that average rents have increased 6.6% in the past 12 months, with the nationwide average rent at an all time high of over €1,400. Across the country, many areas have been experiencing falling house prices, while at the same time rents have been generally rising. This has lead to a scenario in certain areas in Dublin and Limerick, where you can now buy a property for the same price as it costs to rent.

Commenting on the report, Ronan Lyons, Economist with Daft.ie said "Due to the increase in rents and fall in house prices, we are now seeing a situation where in certain areas it has become more attractive to buy, since the costs of renting and buying are almost equal. However this trend of increasing rents may not continue, as the rate of growth in rent has slowed to single digits and the supply of rental property has never been higher"

The average increase in rents across Ireland over the past 12 months is 6.6%. In Dublin rents have increased between 8% and 13% compared with the same period last year, while Dublin's commuter towns have been experiencing a slight fall-off in rents - down 3% on this time last year.

Head of Research at Lisney, Dr. John McCartney, said "Generally, households have two choices – to rent or buy. Over the course of this year, renting has become less attractive due to rising rents. Meanwhile buying has become more appealing due to improving affordability. If this continues, some households will inevitably switch from renting to buying. It is difficult to predict exactly when this switch-back might occur, but two conditions would probably have to be in place - the absolute gap between mortgage repayments and rent levels would need to become reasonably narrow, and expectations about future house price growth would need to be positive.

The first of these conditions already appears to have been met. Daft figures show that, while loan repayments remain higher than rents on average, the gap has become quite narrow. However, it is too early to say that the second condition – a public perception that house prices have bottomed out – has been met."

Rents in the cities and around the country
In Galway rent inflation has slowed to 6% leaving the average rent just above €1,000. Cork average rents in the city stand at €1,166, with year on year inflation of 8.2%. In Limerick the rate of inflation remains static with the average rent currently at €889. A notable exception to the general trend is Waterford city, where the rate of inflation has increased over the past quarter and now stands at 7.3% compared with the same period last year. It is also the most affordable city to live in with an average rent of €821. Outside the main cities, growth in rents has cooled from about 6% three months ago to less than 5%. In South-East Leinster, Connacht and Ulster, inflation in rents is now below 3%.

A full copy of the report is available online at www.daft.ie/report and includes a commentary by Dr.John McCartney, Economist and Head of Research at the estate agents Lisney.

For further information please contact:
Naoise McNally, Daft.ie, 01 4002015

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 September 2007, a report by the Audit Bureau of Circulation (ABC) confirmed that Daft.ie was Ireland's busiest website with requests for over 59 million pages of information received (Page Impressions), 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 70,000 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.