Rents rise by half a percent in early 2011

Cormac Lucey, Chartered accountant and lecturer at the Irish Management Institute

10th May 2011

Cormac Lucey, chartered accountant and lecturer at the Irish Management Institute, commenting on the latest Daft research on the Irish property market.

Ireland had one of the biggest bubbles in recorded history, as measured by the growth in credit relative to national income. It should have been no surprise, therefore, that we would experience one of the biggest busts. And, since 2008, the economic news from Ireland has been unremittingly dismal.

Therefore, I would have expected rents in Ireland to have continued the sharp downward trend evident in 2008 (-12%) and 2009 (-16%) into 2010. The economic news flow and reality in 2010 was truly awful. Forecasts of Irish economic growth continued to fall. The ESRI predicted annual net emigration averaging 50,000 per annum. Deposit outflows from Irish banks led to a dangerous dependence on emergency ECB and to lack of availability of bank credit. The government was forced to turn to the IMF/EU/ECB troika for funding. Having made budgetary adjustments of €15 billion prior to Budget 2011, Ireland had to brace itself for an additional €15 billion worth of budgetary adjustments.

But the evidence supplied by the latest Daft.ie Rent Report is that rents in Ireland did not continue their sharp downward trend in 2010. Instead rent levels have stabilised. Rent levels in April were marginally (0.6%) higher than a year previously and markedly (1.5%) higher than a quarter previously. Indeed, rents in Dublin have risen in three of the last four quarters.

The fact that rents do not appear to have dropped in 2010 challenges my previous thinking and raises an important question: why have rents stabilised despite an enormously challenging economic environment?

The most likely explanation is that the underlying Irish economy should be able to generate annual economic growth of the order of 3% per annum. And, while our economy has suffered some horrendous setbacks over the last few years, the impact of new horrors is now being counter-weighed by the economy's underlying growth potential. It's not that things are getting dramatically better. It's just that bad news is now being counter-balanced by underlying forces of growth in the economy. So, on a net basis, economic activity and related variables (such as rent levels) are now stabilising.

This underlying resilience in the real economy is heartening when one considers that all of Ireland's economic policy settings are currently set against growth:

  • With many billions of budgetary adjustments still ahead of us, fiscal policy will remain very restrictive.
  • Turning to monetary policy, the ECB has started raising interest rates even though a recent Credit Suisse study suggested that an appropriate policy rate for Spain, Ireland, Greece and Portugal would be minus 4.6%! After a decade where ECB policy rates were inappropriately low for Ireland, we now face several years where they will be inappropriately high. The systematic mispricing of credit - and all of the economic distortions which flow from that - is set to continue.
  • Following the recent stress tests, Ireland's credit policy is starkly restrictive with banks reducing the amount of credit extended to the economy as a matter of official government policy.
  • And, with the Euro strengthening in recent times, recent currency moves are imparting further deflationary impulses to an economy.

So, like a boxer who has taken several shuddering blows to the head, the Irish economy is bloodied, reeling and stumbling. But it refuses to hit the canvass even as more blows rain upon its head. That is the good news. But the bad news is that a stabilisation in economic activity and rental levels are just a necessary but not sufficient condition for a fully-fledged economic recovery. The root of our economic disaster lies not in the fall in national economic output, appalling though that is.

The root of our economic disaster lies in our national balance sheet. The asset side is dominated by property assets which continue to fall in value. Meanwhile our liabilities mount. All the while, our equity (total assets - total liabilities) shrivels.

Ireland is experiencing both the processes of debt-deflation (described by Irving Fisher in the 1930s) and a balance sheet recession (the model recently used by Richard Koo to describe Japan's multi-decade recession). For Ireland to truly hit bottom we need a lasting floor in property prices and a halt to the destruction of our national equity / wealth. That looks a long way off.

Rental yields in Ireland (annual rent divided by property value) are averaging 4.0% according to the Daft.ie Rental Report. Such a low rental yield looks absurd and unsustainable when a risk-free investment (German government 10-year bonds) currently yields 3.3%. If Irish residential property was traded on the stock market could it possibly merit a Price/Sales ratio of 25?

Absurdly low rental yields are a signal that residential property prices still have a considerable distance to fall. They are a signal that the equity positions of house-owning Irish citizens will continue to shrink. And they are a signal that, while economic activity may stabilise, consumer spending will remain under pressure as citizens, fearing a pauperised old age, save to repair their ravaged balance sheets.

Rent levels have stabilised. Property prices have not.


HIGHLIGHTS:

Rental Index
Rental Price Index

Stock and flow of properties
Stock and Flow of Rental Properties


SNAPSHOT:

Snapshot of Asking Rental Prices Nationwide
Snapshot of Rents Nationwide

Discuss This Article

  • Re: The Daft Rental Report Q1 2011

    Posted By: Laura Date: Tuesday May 10, 2011 @12:45AM

    There are 3 factors that don't really get a mention:

    1. A considerable proportion of rents are subsidised by the state through welfare and therefore artificially inflated. Rent allowance has been an extremely unpopular cut and has only been marginally cutback for quite some years. In fact almost every single recorded drop in rents has followed a drop in the rent allowance ceiling.

    2. The credit crunch, by its nature hits tenants harder for 3 reasons - they tend to have lower incomes, years of persistent renting at inflated prices has made it difficult if not impossible to save (an average rent of 800 pcm against an average net wage of around 2300 a month leaves little room for survival, never mind savings). Thus the persistent tenant would have to borrow more in order to buy, but is now doubly crippled by the lower chance of getting loan approval in a squeezed market.

    3. Tenants are more likely to pay more than 35% of their income on housing which indicates that they have very little room to tolerate large future increases. (sources: http://www.homelessagency.ie/Research-and-Policy/Cornerstone/Cornerstone-2004-Issues/Issue-21---October-2004.aspx and Tony Fahey, Brian Nolan and Bertrand Maître "Housing, Poverty and Wealth in Ireland") Fahy et al indicate that evidence they have collated indicates that private renters are several times more likely to experience poverty than owners and that a far higher percentage have difficulty in paying rents. This indicates either a) they were less well off to start with or b) they have to pay a premium for renting.

    So put together the 3 cases:
    1. tenants are already heavily squeezed by high rents in proportion to income (not to mention tax increases)
    2. they are less well off to start with which is why they are renting
    3. they are less likely to be able to obtain mortgages to buy

    While there would be a natural increase in renting due to higher unemployment, reduced incomes and difficulty in obtaining mortgage credit, ability to pay more is also constrained, so changes are likely to be marginal.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Mary Stephenson Date: Tuesday May 10, 2011 @06:08AM

    i think the main reason why rent is up is because the unaivalability of young families to get a mortgage and the worry that mortgages set to rise, some of the rent hikes in Dublin have been extreme (a rise of 200-300 Euro on same property within 2 months) which poses a huge risk for a new collapse and landlords should be aware of what they might creating for themselves here.

    I think one of the questions alandlord should ask is the property really affordable in the longterm for tennants. From my own experience as a landlord, I prefer to let a property at a good price, knowing I have the right tennants who will also stay for at least a year.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Laura Date: Tuesday May 10, 2011 @01:03PM

    You're absolutely correct. Bearing in mind that the "average" rent (which doesn't specify size location or type of unit) is 825, this represents a yearly payment of 9900 euros or 99k over ten years.

    For a taxpayer paying approx. 26% tax on their income this requires an income of about 13500 before other living costs are taken into account. If we say the notional family in this case would require 400 a week to live on (frugally) such a family unit (or single) would require a net income of about 30k.

    For a taxpayer paying the upper rate of tax (which would probably be roughly net of around 31% for somebody in the 10k or so marginally above the lower tax band) the required income to pay this rate would require an annual pre tax income of 44.5k per annum. This is still assuming that the tenant only required another 400 per week to live on.

    Such figures would suggest why renting is increasingly becoming the tenure only for the very poor, the very desperate and the very rich.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Lorcan Date: Tuesday May 10, 2011 @07:37AM

    Could Government rental subsidies be having an effect on prices?

    In many regions rental subsidy is now above the average rent.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Tuesday May 10, 2011 @08:11AM

    Interesting figures.
    However, renting a 3-bed semi-d in Dublin 18 for close to 10% less than the snapshot rent, I was somewhat surprised.
    All the more as I've kept an eye on rents there (yearly review coming fast) and they seemed to keep decreasing slowly and steadily.
    So I looked at today's (10/05/2011) Daft rental adds for Dublin 18.
    There were 19 houses to let, with an average asking rent of 1390 euros, a median of 1300 euros (and an average of 1366 euros when the lowest and highest asking rents were excluded).
    These are 9%+ lower than the snapshot rent of 1473 euros, which confirmed my rent is fair but didn't match Daft's figure.
    So could it be that 3-bed apartments in Dublin 18 ask for more rent than 3-bed houses?
    There were 32 such apartments, with an average asking rent of 1512 euros, a median of 1423 euros (and an average of 1448 euros excluding lowest and highest).
    Therefore, it seems apartments are at a premium of around 6%-9% in the 3-bed Dublin 18 segment!
    I'd be curious to know if this could be a pattern across Dublin.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anon Date: Wednesday May 11, 2011 @12:04PM

    Hmm, Dublin 18 is a funny one though.

    D18 includes areas as diverse as Foxrock and Sandyford, so unless you compare like for like, it's hard to know. As you say your property matches well with similar properties around.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: NAMAwinelake Date: Tuesday May 10, 2011 @09:16AM

    Well done to DAFT.ie for spending the time and money on producing this report which is based on DAFT’s extensive database of asking rents. And well done to Cormac Lucy for providing an informative and interesting commentary.

    “why have rents stabilised despite an enormously challenging economic environment?”

    (1) Rents mightn’t have stabilized at all in the sense that the DAFT.ie analysis is of asking rents rather than actual rents. The PRTB is the receptacle of all actual rents in the country and although it publishes addresses and some property details, it does not publish actual prices on data protection grounds. DAFT.ie produces arguably the best indicator of rent levels in the country, but the input data is still asking rents, not settled rents.
    (2) Rent assistance provided by the State is acting as a floor. Now it is the case that many properties that are advertised for rent will not accept rent assistance claimants but it is arguable that the landlords for these properties still reference their prices to the State assistance, which by standards of other countries is generous. The latest levels are available here - http://www.welfare.ie/EN/Schemes/SupplementaryWelfareAllowance/Pages/RentSupplement.aspx
    Will rent assistance survive the “very restrictive” fiscal policies that lie ahead? Won’t the €500m spent annually on rent assistance be cut at a time when more families will lose their homes? And won’t that mean that maximum assistance for individual properties might fall dramatically?
    (3) Landlords, particularly those with Buy To Let mortgages, have no choice but to offer their properties at a price which allows the mortgage to be serviced or repaid. The actual rental price may be settled at a lower level if the landlord can convince their lender that it is the best price.

    The population of Dublin actually fell in the year to April 2010 according to the CSO. Is there any evidence of rental property being retired from the market? NAMA has 6,000 apartments within the M50 with planning for another 10,000. Ireland has few institutional landlords and we have a huge number of private landlords (35,000 landlords own an average of 6 properties as revealed by non-principal property tax data) so on a demand:supply basis and on an affordability basis (assuming wages still come under pressure with new taxes and even pay cuts) and if the evidence from the recent Allsop/Space auction is anything to go by, existing yields are in the 9% range, so even on a yield basis, the indications are that rents will continue to come under pressure.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Paul Date: Tuesday May 10, 2011 @09:56AM

    "...Rents mightn’t have stabilized at all in the sense that the DAFT.ie analysis is of asking rents rather than actual rents".

    To be fair and balanced you must acknowledge that the rental market is indeed showing signs of stabilisation. While you may not agree with the sentiment of the reports findings and knock it on the basis that is based on "asking rents" this is not really a valid argument as all previous DAFT reports were also based on "asking rents" so on a like for like comparison basis it is fair to say that the rental market is showing signs of stabilisation and even increases in some urban locations.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: NAMAwinelake Date: Tuesday May 10, 2011 @02:00PM

    Paul, I'd agree with you that this report is comparing apples with apples - asking prices with asking prices. However is it not behaviourally the case that in a buoyant rental market that settled prices will be closer to asking prices than in a distressed market?

    So three years ago an average asking rent might have been €1,000 with a settled price of €1,000 or possibly €1,050 if there were a few people chasing the same property.

    Today, the asking price might be €750 but the settled price might be €700 because there is so much stock owned by so many different landlords chasing a smaller number of potential tenants.

    For the little it's worth, I think rents have been stabilising for a year now but I think they are still coming under pressure.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Laura Date: Tuesday May 10, 2011 @07:26PM

    You are right on the information available from PRTB but a large proportion of landlords still don't register with PRTB. While there are penalties, they are rarely levied. What astonishes me is in a case where my landlord simply wouldn't pay it but was happy to send in the form as long as the money came out of my pocket, PRTB didn't bother quesitoning why the other 11 units in the same house were not registered. So obviously PRTB only has a subset of the rented sector.

    I would also argue that PRTB tends to represent the higher priced segments of the rented sector since tax compliant landlords would have to charge higher rents in order to meet mortgage costs. Lets face it, if you don't see it as your obligation to pay tax you can afford to discount rents by up to 30%. I would expect that the vast majority of "can't afford to live in my house" bridage of owners don't pay tax as they cannot afford to.

    I'd hazard a guess that the "black economy" in housing is bigger than ever.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Tony Palmer Date: Tuesday May 10, 2011 @09:45AM

    A poor analysis of the rental report.
    "...rents do not appear to have dropped in 2010 challenges my previous thinking"
    Did he not read the Q4 2010 report?
    "The most likely explanation is that the underlying Irish economy should be able to generate annual economic growth of the order of 3% per annum"
    Wrong again, will someone tell Cormac that if people are not buying they will rent?

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Alessio Calcagno Date: Tuesday May 10, 2011 @10:02AM

    With the mortgage market on hold, a rent spike comes not a surprise, at least in the Dublin area. For the rest of the country, I think unrentable houses have been withdrawn from the market.

    But this is overall a really really good news. This mean jobs are out there (the good-quality-multinational-export-driven jobs) and when the house market will bottom out for a six months period.

    However, we must fix the bank first.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Monday May 23, 2011 @09:36PM

    WE MUST FIX THE BANK WELL NOW WE THAT IS i WILL HELP BUY PUTTING EVERY CENT OF MY SAVINGS INTO UK BANK ACCOUNTS WHY SUFFER
    YOU JUST CAN NEVER TRUST IRISH BANKS THEIR TOP PRIORITY IS CORRUPTION AND CHAOS AND MORE AND MORE

    • Reply to this message
  • Re: The Daft Rental Report Q1 2011

    Posted By: Ronan Date: Tuesday May 10, 2011 @10:35AM

    Most of the contributors to date on this thread have hit the main issues.

    1. Daft has only asking rents. It is not able to speculate on "rents", only "asking rents".

    2. How many Daft rental reports can come out without acknowledging the elephant in the room: government subsidisation of the private rental market? The government foots the bill for 50% of private tenancies - is this not worthy of comment? Do you think this has no effect?

    As it happens I've just rented a house in North Dublin City, a 3 bed semi-D, newly refurbished, not without its flaws but a very nice house. It was advertised for €1200, but let for €1100. This reduction is missed by Daft, I wonder is it more indicative of the true state of affairs? It comes in below the average rent for its postcode (an average calculated using ASKING rents).

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Ronan Date: Tuesday May 10, 2011 @10:39AM

    Oh, and for the love of god, will you take any reference to first time buyers getting Rent-a-Room income out of your reports? This isn't 2006 :)

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Tom G Date: Tuesday May 10, 2011 @10:50AM

    Very good piece as usual. Another factor that isn’t mentioned is the effect of negative equity in encouraging renting. There are plenty of couples /families particularly within Dublin, who bought during the period 04- 07 whose family has since grown & who require a larger home.

    These owners are renting out their mortgaged home to tenants, because they can't sell due to negative equity, on a massive scale in some cases, and are renting bigger properties, because they can't/won't buy. However they can afford to take the financial hit of renting their property at a small loss & renting another property at a cost slightly higher than their current mortgage. An increase of 15% - 25% in their overall monthly cost of housing.

    This pattern is growing and will continue for some time because the blocking factors of negative equity on one side & lack of access to mortgage credit/unwillingness to enter into the property market further are not going to change for some time.

    This factor will also stabilise the rental market for the same period. There’s also the strong possibility that these families will not wish to enter the property market again for many years, as they adjust to the flexibility & value that renting offers them & they continue to feel the sting of negative equity.

    Leaving Dublin with the cohort of middle class/professional renters that exist across Europe that has been missing in the Irish rental market up to the recession. Granted this group will be poorer than previous middle class/professional generations & subsequent middle class/professional generations, as they are paying a mortgage on a property not worth what they paid for it, along with the associated property taxes & costs of ownership, but they are managing to house their families apropriately, however complicated & unpleasant the process.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Yields or Bust Date: Tuesday May 10, 2011 @11:16AM

    Cormac Lucy states


    "..Rental yields in Ireland (annual rent divided by property value) are averaging 4.0% according to the Daft.ie Rental Report. Such a low rental yield looks absurd and unsustainable when a risk-free investment (German government 10-year bonds) currently yields 3.3%. If Irish residential property was traded on the stock market could it possibly merit a Price/Sales ratio of 25?

    Absurdly low rental yields are a signal that residential property prices still have a considerable distance to fall. They are a signal that the equity positions of house-owning Irish citizens will continue to shrink. And they are a signal that, while economic activity may stabilise, consumer spending will remain under pressure as citizens, fearing a pauperised old age, save to repair their ravaged balance sheets.

    Rent levels have stabilised. Property prices have not. ."

    The commentary regarding the risk free alternative investment goes to the heart of the issue in relation to property pricing in Ireland since c2000.

    As indicated such low yields looks absurd and unsustainable. So the question is therefore at what yield do the comments change to read such as 'rental yields now look in line with long term averages and as a result house prices are now fair value - not cheap but fair value'.

    Well as indicated here many times before that commentary changes when that average yield number reads 7%.

    It must be remembered (and the analysis suggests - despite all the noise in the numbers as indicated in the comments above) that the market is not now based on ‘averages’ as we’ve come to understand but it is firmly a regional/city rural divide. So applying averages may in fact be somewhat misleading insofar as certain parts of the country are concerned. That said as a guide 7% average market yields are an extremely good fit as a market proxy.

    Therefore, using the current 4% average yields as noted in the survey and compared with the long run average of 7% would suggest the correction is house prices is likely to continue as Cormac notes above. This is not Nyberg Groupthink – this is long division.

    The average house price market falls therefore to achieve average long term yields of 7% is still a very unpalatable additional 75% loss from here.

    This may seem completely draconian but as Cormac suggests at the top of his note the size of the bust is generally in line with the size of the boom - and by any measure our boom was off the scale.

    So despite the reprieve in rental prices the correction in house prices looks far from over. An additional 75% fall in house prices from here would have PTT falls in house prices average at c85% at the average market level.

    The number seems extraordinary however unless there is a break with market mean reversion that type of fall looks very much on the cards. Unless of course rentals start to rise at an impressive lick from here, which seems highly unlikely for all the reasons contributors above have suggested.

    As before the question to me is still one of loss apportionment – what parties should be requested to bear a PTT loss of 85%.

    It seems almost juvenile to suggest that 100% of the burden should be borne by property consumers when ultimately house prices are determined by our beloved banks.

    As I have been suggesting on this site for quite a while ordinary house buying folk were duped and mis-sold financial products in the form of mortgages for the best part of decade. Not because consumers didn’t understand but because the banks on the other side of the table should simply have known better and more importantly had an obligation to know better. It’s the banks day job for which they are Regulated and where the ‘buyer beware’ banks get out clause does NOT apply. (See 2005/2006 Regulators codes of conduct)

    This is not a case of the banks crying about not being able to know or read the future it’s a case of not being able to read the past.

    Mean reversion insofar as residential property in Ireland is concerned has long very well established trends. The banks know this and by any measure have significantly more market data available at their disposal than any individual or property consumer therefore the banks suggesting, as I’ve heard recently, that they couldn’t have known the extent of the correction is, to put is mildly, cobblers.

    The ongoing pricing error sits firmly in the banks quarter – they had the data to tell them that moving away from long run yield trends was at best irresponsible and at its worst fraudulent.

    The long run trends are there to be seen –in fact all available on the Governments own website data with a small bit of manipulation and interpretation long run trends are clearly suggesting that lending money on anything approaching -1% to -1.5% below long term yields was asking for trouble.

    Well at the height try -6.1% below averages for size as net yields got to 0.9% at the top of the craziness.

    So when the issue of debt forgiveness raises its head again and again over the next number of months please stop and ask yourself one very simple question:

    Who should have known better the banks or the consumer?

    For me the answer is the banks very day of the week. Those in control of the leverage in a leverage driven market hold all the aces to that market, and as a result logically they have a duty, and should be compelled to participate in the majority share of the losses.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Tuesday May 10, 2011 @04:05PM

    The banks are a business that is out to make money and they were doing that very well.

    The consumer was taking advantage of easy credit also with the idea of making money for themselves.

    The responsibility lies with neither of these two. They were acting predictably.

    The government and the regulator had the power and the tools in place to control both of these parties but did not act.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Sunday June 12, 2011 @09:58PM

    Most of the foregoing from an investors viewpoint is irrelevant. I purchased my first rental property forty seven years ago-still have it-for 800pounds. The rent is now 800Euro per month.Property is long term and by that I mean thirty to fifty years. Not five years. Now is the time to buy, but of course in the right place. Wasnt it Harry Crosby who said that he wouldnt buy in Donybrook because he did not know Donybrook.

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  • My mortgage is" underwater" as is anyone who still owns a home.

    Posted By: Anonymous Poster Date: Tuesday May 10, 2011 @12:43PM

    Enjoyed your articles. I should have bought a house in Ireland years ago, however I'm not about to give my own house away now. .The US, is about to go Bankrupt,as the Dollar is worth nothing. Obamma spent $3 Trillion dollars in less than 3 years and is looking for another 2 Trillion. We give billions to the entire world while 1 out of 7 families here go homeless and are starving. Houses are foreclosed upon at a record rate and the banks are still getting bailouts. Our people who have lost jobs and homes are working 2 and 3 jobs to pay for rental property and the banks who were bailed out with our tax dollars havent paid us back.either Some of the banks are giving mortgagesvery few but making it extreamly difficult.The great US of A has become a third world country. Our Jobs are outsourced overseas, and like Ireland the rents are awful. Anyone like myself who is fortunate enough to still have their home and mortgage even if it's underwater and a job are upgrading because they cant sell. I have a lot of sibling in Dublin were I was born I just lost my husband .Compliments of Bernie Madoff who wiped us out ; My 2 kids live out of state and I dont see them much So you can see why I"m interested in returning home. At age 67 upon my husband"s death I returned to work. But feel sorry for our kids and their kids who will have to pay off this enermous deficit of $15 Trillion and "He want the congress to raise the deabt ceiling.This might not have been what yo wanted to hear but good old Ireland is still better off fiancially than a lot of the other countries.we know how to tough it out until things turn around which will be not 6 month but several yeats. .

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Gussy Date: Tuesday May 10, 2011 @02:56PM

    This report is nothing more than propaganda and wishful thinking. Rents will continue to decrease, I think you'll find it has something to do with what Adam Smith called the Law of Supply and Demand, not to mention rising unemployment, rising migration, and a 500 billion bailout. What was P.T. Barnum said, oh yeah there's a sucker born every minute, he'd have had a ball here in the land of the Celtic Ostrich.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Tuesday May 10, 2011 @03:47PM

    great to hear some positive news and hopefully more to come. we are definitely turning the corner so to speak - it was the same in the early 90s - back then the unemloyment rate was similar to nor, house prices stagnant but the undelying economy was silently growing and suddenly the celtic tiger was born. There will be another boom maybe in 5 - 10 years and house prices etc will shoot up again and those who had the courage to invest now will be the the new rich landlords - and the nags and complainers will still be complaining ..cant keep some people happy...life never changes!

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Dec Date: Tuesday May 10, 2011 @05:54PM

    Well Said there It can't stay bad forever, It is a market!!

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Laura Date: Tuesday May 10, 2011 @07:42PM

    You have to be taking the mick, no?

    The export led boom was different to what is going on now.

    Last year the IDA created 10,500 jobs in multinationals

    However the same multinationals shed 9500 jobs - for which they took your TAX subsidies, your 60% PRSI rebates, your job creation grants - as the ad goes, "they put their hand in your pocket" - "thank you."

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  • Re: The Daft Rental Report Q1 2011

    Posted By: a big banker Date: Tuesday May 10, 2011 @04:47PM

    stop with the dodgy forcasting... getting tired of people in the know not knowing a thing and talking up the market.. only reason rents have not dropped through the floor is the government inability to take charge of the problem.. I'm talking about NAMA of course if they rented out all the empty flats/houses they now own rents would be a fraction of what they are... I know this would flood the market, not good i hear you say... much better to let these propertys(most of which are only built in 1999-2005 rot and then have to use tax payers money again to knock them down.. clever.. so stop telling us what you what us to hear.. news flash.. 30,000 people are now in 6 months arears with there morgages.. add to that an end to morgage relief in dec 2011.. landords like the bankers and the t.ds and the developers only worship money... thou shalt not worship a fulse God... lets not go back to the bad old days of the celtic tiger.. or this time he might bite our head clean off..

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Tuesday May 10, 2011 @06:50PM

    Hey guys,

    whats with all the moaning? do you all want the country to keep crashing and waste more of your precious years in such an atmosphere? spread enough negativity and you will succeed in destroying anything positive - it is in all our interests that the property market recovers and rents remain stable - otherwise no one will invest in Ireland - we are already one of the cheaper countries in western europe to rent -- cop on and be glad you are healthy enough to outlive the recession and live in a growing economy again and dont ruin the last few years for the elderly or terminally ill by creating such a negative atmosphere

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Tom Date: Tuesday May 10, 2011 @06:57PM

    Such negativity. Can some people not take a bit of good news? Is it the Irish thing?
    After reading the excellent daft report I'm more confident in the rental market and am proceeding in a contrarian manner to buy a fixer upper to rent out. I'm getting it at a great price, the cost of renovation is much cheaper than a few years ago and if rents remain stable or even fall a wee bit I should be fine.
    I know I'm taking a risk, but I will have kept someone in a job for a few months and improved the value in an otherwise unsightly property. You reap what you sow.
    Sure beats whinging with the herd.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: NO2011FAN Date: Tuesday May 10, 2011 @09:06PM

    rents are up..... the prices have hit bottom.......
    where have i heard this before? this time last year, i think.

    because advertised rents are up, does not mean rents are up.
    simililarly, advertised house prices are kind of pie in the sky. the vendors who will accept what a cash buyer thinks is the actual value of the property, will sell their homes. ones who do not, are quite often still readvertising, albeit at a much reduced 'asking' price, one year later.

    if the bubble started in 2000/2001 etc, then perhaps those are the house and rent prices we should be considering. that's the way our disposable income is going.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Date: Wednesday May 11, 2011 @10:25AM

    There are a number of very surprising changes in values here Q1 2011 -v- Q4 2010. Is the data correct? If so, it is clearly not always that meaningful!

    Examples:
    D6 4 Bed Q4: 2,861 Q1: 1,917 Change: -33%
    D3 4 Bed Q4: 1,238 Q1: 1,515 Change: +22.37%
    D3 5 Bed Q4: 2,457 Q1: 1,726 Change: -29.75%

    Overall, the figures do show that the rental market has stabilised, though as previous posters mention, this is probably due to the Dept of Social Welfare's signifiant involvement in the market.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Fr Dougal McGuire Date: Wednesday May 11, 2011 @04:21PM

    The reason some rents are going up is because they are for desirable residences in desirable neighbourhoods. Supply and demand, contarary to popular opinion, there is a shortage of nice units in nice places. Before the usual gang of overpaid, underworked teachers and like minded bearded trade unionists jump down my throat, rents have dropped in most other areas and will continue to do so.
    As regards giving out about rent allowance! it gives unbelievably good value to the state, it supplies 10`s of thousands of homes at a cost the state could not match if they had to provide them, plus of course the cost of managing , maintaining, insuring them etc. Just take a look at the boarded up vandalised local authority homes accross the country. Do we really want to stop rent allowance and hand over the housing of these people to the Local Authorities who cannot manage what they have? If anything rent allowance should be increased to cover the real costs. There is a reason why most landlords will not take rent allowance, and it is nothing to do with tax avoidance, it`s got to do with preserving your sanity.
    lets all stop the moaning and get a bit of positivity back into our lives, let us take a good look at ourselves and see what we can do to make things better, not seeing what we can take. eg. that duvet day you took( sorry, entitled to) off? Were you really sick? That is just another form of theft. Do you really need the half hour a week off to cash the non existent cheque?

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Fr Dougal McGuire Date: Thursday May 12, 2011 @06:12PM

    David
    You are just emphasising my point!
    There are only a few nice residences in nice areas available, Supply and Demand! It`s not some great conspiracy to lower the figures, it`s just a fact of life, always was, always will be. Click into most rural towns and it`s possible to find hundreds of units to rent, huge supply, low demand = falling rents, take a look at your own examples, Low supply, large demand= rising rents. At last we are coming back to the basic tenets of property, location, location, location, it`s something that was forgotten about for a long number of years, in time these good residences in good areas will even sell. As despite all the moaning, we will get out of this!

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  • Re: The Daft Rental Report Q1 2011

    Posted By: David Date: Friday May 13, 2011 @01:55PM

    Not really emphasising your point when the report actually shows a decrease in 2 of the 3 areas!

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  • Re: The Daft Rental Report Q1 2011

    Posted By: David Date: Thursday May 12, 2011 @04:12PM

    There is nothing wrong with the figures for these areas, the prob is there is a very limited number of these type of properties for rent in these areas and therefore the % changes are heavily influenced by the small sample base e.g.

    D6 4 Bed Q4: 2,861 Q1: 1,917 Change: -33% - currently only 34 properties of this type for rent
    D3 4 Bed Q4: 1,238 Q1: 1,515 Change: +22.37% - currently only 8 properties of this type for rent

    D3 5 Bed Q4: 2,457 Q1: 1,726 Change: -29.75% - currently only 5 properties of this type for rent

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Wednesday May 11, 2011 @04:03PM

    Things change fast - we will be booming before the nags will have stopped nagging - sure isnt that what the old Mcdonalds add was all about!!

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  • Re: The Daft Rental Report Q1 2011

    Posted By: NO2011FAN Date: Friday May 13, 2011 @03:01PM

    ESRI confirming what we thought was the case. prices have been falling faster in last couple of months than before. i'm starting to see the light at the end of the tunnel. i know, some people have paid over the odds, but now that house prices are coming down to a more realistic level, we''ll soon be able to move on. and the economy will start rolling along again.

    .

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  • Re: The Daft Rental Report Q1 2011

    Posted By: seamus Date: Sunday May 15, 2011 @11:15AM

    I agree with th above. House prices will probably fall by about 60 percent from peak to trough by which time they will be slightly undervalued, typical of a property crash - then suddenly people are going to start buying again and the recession will become a distant memory - If you look at most speculation bubbles, it takes about 5 - 6 years for the turnaround which is about where we are now - but people were slow to accept that house prices couldnt keep rising and now of course will be slow to accept that house prices cant keep falling - I bet two years from now we will be seeing house prices gains - maybe not much - one or two percent - but it will happen - it always has - always will - fact.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: John Date: Monday May 16, 2011 @12:48PM

    The irish people were in complete denial about the reality of house prices and rents in 2007 and apparently nothing has changed. So many people have lost sight of what a "normal" & healthy market is. Prices are still way too high. People are complaining about the recession and how the quality of their lives has decreased. It would definitely help if people weren't spending 40% of their income on accomodation. Wake up people! It is in the interest of many people, companies and institutions to maintain artificially high prices. It is NOT however healthy to the majority of people and the economy.

    The best thing that could happen to this country would be to see the housing market regulate itself naturally by the rule of supply and demand. This would lead to price levels lower than they are today, allowing people to live normal lives, save, invest, etc. The government, the medias, etc are all trying to maintain high prices but this is denial, this is dangerous! We are all suffering from this. The whole system is paralyzed because of this. It is my opinion that a drop in rents of another 20/25% is something to expect. Too many people are squeezed to the breaking point. This cannot last. Smart landlords will recongnize the reality and drop rents significantly to keep good tenants in and have property let 100% of the time. The market will punish stubborn and ignorant landlords who still think that things will come back to "normal times" like 2007.

    I repeat myself: It would be healthier for the economy and the majority of people that the market go down another 20/25%.

    Any comments welcomed.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Monday May 16, 2011 @04:38PM

    In respnose to the comment above - no landlord expects rents to come back to 2007 level any time soon - but one thing to remember is that rents did not dramatically increase in line with house price increases and so it is therefore very likely that they will have less to fall and are now affordable by any standards in western europe. I think you are confusing house prices with rents which are two different things - rents will not fall - especially since more and more people are renting now - and this is a good thing for the country and the economy - we wont get europeans investing in Ireland is rents keep falling and they see no retunr on their investment - So once again the fact the this report proves that rents have stabilised is a good thing for the economy and Ireland and maybe help people start realising that we have turned the corner and start spending as people are generally saving alot more that before - I dont believe that people are squeezed to breaking point from their rents!! most people I know are saving alot more since their rents and or mortgages have come down so much since 2007.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: paul Date: Thursday May 19, 2011 @06:03PM

    Rents are only staying where they are because of social walfare payments, if and when we finally go broke these will be gone, the clock is ticking, its only a matter of time.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Monday May 23, 2011 @09:17PM

    As above, I think they will have to raise rent allowance sicne it would be cheaper and easier than providing houseing for all those who need it and better to get those on rent allowance eventually buying a house to give their house some value

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Wednesday May 25, 2011 @09:19PM

    Great that rents have stabilised and even going up. Being a landlord I have heard my fair share of tenants complaining saying they can negotiate any price now..well the tide has turned again and I will now be setting the prices .the people above who are complaining about the report are obviously tenants ...my message to them is ..go buy a house ...or if you cant get a mortgage..face reality..you gotta rent and with so many renters, prices will eventually rise again and again and again and again....!

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  • Re: The Daft Rental Report Q1 2011

    Posted By: PC Date: Wednesday June 8, 2011 @03:40PM

    I had a good laugh at the some of the people above calling people that disagree with this report doom and gloomers. Takes me back to 2006 where we heard something similar. The question is, are there more people beginning to rent than leaving the country?

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  • Re: The Daft Rental Report Q1 2011

    Posted By: David Date: Sunday June 12, 2011 @09:42AM

    I had a great laugh at some of the people disagreeing with findings of this report, namely that rents are on the increase. It takes me back to 07/08/09 when the very same people assumed a gleefull stance and heralded the Daft rental reports which were showing rent decreases as Gospel. There is hypocrisy on both sides of the argument

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  • Re: The Daft Rental Report Q1 2011

    Posted By: bob Date: Friday June 24, 2011 @05:45PM

    i rented varous properties 2 bed in north co dublin and i see the same properties that i rented for €1000 in 2009 is now rentable for €800 this is a 20 percent drop in 2 years in 2008 it was 1200 so over 3 years it has dropped 30 percent,2 other properties i rented have dropped similarly over the last few years in the sane location.

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Anonymous Poster Date: Tuesday June 28, 2011 @10:18PM

    good news - ireland has highest birth rate in europe!!!! so even if the foreigners go, there will still be a huge demand for houses etc as families swell...the next bubble may already be in the making..but now lads before prices rocket again..

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  • Re: The Daft Rental Report Q1 2011

    Posted By: Arthur O Hara Date: Wednesday July 6, 2011 @12:14PM

    Can we really be expected to believe what we read in the Daft Rental report for Q 1 2011? I doubt it!

    This is a direct quote from the opening paragraph of Cormac Lucey's report above -

    "Ireland had one of the biggest bubbles in recorded history, as measured by the growth in credit relative to national income. It should have been no surprise, therefore, that we would experience one of the biggest busts. And, since 2008, the economic news from Ireland has been unremittingly dismal. " Surely if Daft was at least half as good then as it wants to infer now they would have been able to determine that back in 2008 and speak as vehemently about it.

    For Cormac Lucey to base his report on information from Daft.ie is to say the least chancy.

    It has just come to my attention that Daft had a bug in their system for a very long time, certainly from the middle of March 2005, which caused them to miss out on property rental advertising revenue. On that account alone how can we rely on them to give accurate statistical information now? Do they just go with the flow or try developing reports that might have a bearing on the property markets in so far as it relates to their business. I suspect daft are experiencing fiscal difficulties because they are now charging for what was once free and blaming it on a bug in the system! Wow!

    A lot of what is written in the Quarter 1 Rent report is obviously the type of thing that assists the grass to grow green in Texas. When you see some of the wordings contained in this relatively short report - "I would have expected"; "do not appear "; "The most likely explanation" and "activity may stabilise" - how can you put much credence on it.

    Furthermore I question some of the statistical information given out by Daft.ie. For instance:-

    •Our group of sites attract 3.65 million unique browsers each month*
    •Combined our sites deliver 165,626,429 page impressions monthly*

    Very doubtful according to Alexa and my own research!

    I'm quite sure the Daft administrator will not allow my comments onto its website.

    Regards,
    Wed 06 Jul 2011 1210 GMT Daylight Time Wk. 27.

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