Still a renter's market, as supply outpaces demand.

Jill Kerby, Personal Finance Journalist

25th May 2010

Jill Kerby, Finance Journalist, commenting on the latest Daft research on the Irish property market.

Young, prospective home-buyers with steady(ish) jobs, no debt, a bundle of cash burning a hole in their accounts and a serious case of nesting-syndrome, are back on the weekend viewing circuit, say estate agents.

They tramp in and out of three-bed semi's, city townhouses and dez-rez river-view apartments in all our major cities, then mark them off the listings they've torn out of the weekend's property pages.

It's Spring, for crying out loud; estate agents and property supplement editors take note: it's what singletons and young couples do on sunny Saturday and Sunday afternoons in April and May when they can no longer suppress the image of their future offspring's carriers, buggies, cradles, cots and toys filling their 500 square foot rental apartment or tiny city centre cottage to capacity. It does not represent a 'green shoot' or other sign of 'recovery'.

The sensible viewers - at least the ones who read the rest of the domestic news - will ignore the self-serving 'we're out of recession' nonsense, and keep paying over their rent.

They at least know that unlike friends and colleagues who bought property in the bubble years, they can always hand in their notice to their landlord and get a nicer place if they want, probably at a much lower price than what they're paying for the past few years. If they lose their job, they've got a cushion of cash they can use to take the time to find another one, to retrain, to set up a business or immigrate.

The latest quarterly Daft.ie rental figures clearly show that this is still a renter's market, and that this isn't going to change so long as supply outpaces demand.

Other recent reports, from the CSO, the Irish Property Investment Report from the Irish Mortgage Brokers and PropertyWeek.ie and the ESRI/PTSB House Price Index also show that residential property prices are grossly overvalued and still falling and that there is still strong outward migration and unemployment. (Using yields as the starting point, the highly technical Irish Property Investment Report suggests that investment properties are currently overvalued by an average of 37% in Dublin, 43% in Cork, and 39% in Galway).

Throw in the reluctance of the banks to lend, the bad, bad news about the euro and indebtedness here and in the eurozone, and the longer term rental market starts to look a little firmer.

Property investors, with buy-to-let residential properties in Dublin and Cork cities, can also take a little reassurance from these latest Daft.ie figures. Their rents have stayed pretty static, with Dublin city centre rents actually up 1.3%, though other areas of the city and county are either neutral or down by 0.2% to 0.4%. (Year-on-year, rents are still down in Dublin between 13.3% and 15.9%, depending on the area).

If there's any good news for the rest of country, the Daft.ie figures show that while the fall in rents continues, it's at least at a slower pace than it was during the same quarter in 2009, when minus 4% and 5% was recorded.

Aside from Cork City, landlords are still struggling this quarter. Their rental income is down 3.1% in Limerick city, 1.2% in Galway and 0.5 in Waterford.

The year-on-year collapse in rental income is pretty shocking, given how borrowing rates have started creeping up, especially for the amateur landlords who may not have secured interest-only trackers or fixed rates. They are looking at fall of 11.8% in Cork, 8% in Galway, 12.9% in Limerick and 11.2% in Waterford.

Landlords with weak hearts should desist from looking at Daft's estimate of the size of the fall since the 2007 rental peak.

As someone who spent more than half my life as a tenant, first in Montreal, a terrific renting city, and then here in Dublin in the 1980s, I think the development of a strong rental market in Ireland is very welcome. The quality of properties has soared (even it the management of them often leaves something to be desired). Regulation isn't too onerous for landlords and provides plenty of flexibility for tenants.

If there is a danger, it is that the loss-making nature of so many buy-to-lets in particular - national average yields are 3.6% overall - could result in a deterioration of the rental housing stock if amateur landlords find it increasingly difficult to square the rent they receive with the cost of servicing loans and maintaining or periodically upgrading their properties, a necessary expenditure if you want to command a higher price.

The real economy, as opposed to the statistical one so beloved of economists, may be dis-improving more slowly, but it's going to take more than fractional improvements in the pace of unemployment, Exchequer tax returns, or even consumer confidence to restore it to a state of recovery that the ordinary person can recognize.

And that's only going to happen when they see that foreign and domestic businesses are hiring again, exports and domestic consumption is strong, the banks are solvent and open for business, the deficit and national debt is being paid off, and the euro is stable.

Until then, renters should be grateful that at least the size and quality of the rental market in this country is so robust: it sure beats the bedsit-land most of us lived in during the 1980s.


HIGHLIGHTS:

Rental Index
Rental Index

Stock and Flow of Properties
Stock and Flow of Properties


SNAPSHOT:

Average asking prices across Ireland in Q1 20010
Asking Prices in Q1, 2010

Discuss This Article

  • Re: The Daft Rental Report Q1 2010

    Posted By: Liam Clancy MBA, CEO Capel Abbey Property (Dublin City Centre) Date: Tuesday May 25, 2010 @02:31AM

    An interesting report and I would like to complement the writer. The Buy-to-Let investors are certainly not increasing their property holdings. Very few landlords have bought additional properties in the past two years and new, young entry, investors are looking elsewhere for opportunity.
    According to the Irish Banking Federation only 385 Buy-to-Let loans were drawn down in Q1 of 2010 - compare this to 6,647 loans drawn down in Q1, 2006 for Buy-to-Let purposes. So landlords are out of the market, property tax is looming, a property levy is already in existence, lower rents, costly energy rating requirements, tenant registration fees, severe capital deprecation of the asset - things have never been less attractive.
    In central Dublin we are now already noting a decline in availability and choice for tenants. Less investment has reduced property availability and the leading indicator of a changing situation is the small increase in Dublin rents mentioned in the report. Therefore some relief for Dublin landlords in the form of higher rents looks likely very soon. For tenants this is not good news and it should be pointed out that Dublin City has a micro-economy where residential supply has always been tight due to the large student, medical and working popluation.
    With very little investment or building taking place we see a strong Autumn correction in residential rents in favour of the landlord. The correction could be quiet significant if job creation picks up. The two slack months of July and August might see the last opportunity for a while for tenants to lock-in at bargain rents.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Charlie Date: Tuesday May 25, 2010 @06:00PM

    I see that spelling wasn't part of your MBA curriculum . The word is quite NOT quiet.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: PAUL Date: Wednesday May 26, 2010 @04:56PM

    Nice one Charles!

    Paul, BSc Surv (Hons), MIAVI, IPMFA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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  • Re: The Daft Rental Report Q1 2010

    Posted By: David Date: Thursday May 27, 2010 @01:06PM

    .......or grammer part of yours Charles!

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Anonymous Poster Date: Monday March 19, 2012 @10:11PM

    Poor guy - bad at grammer, liked spelling at national school.....not able to contribute to the debate.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Peter Date: Tuesday May 25, 2010 @03:38AM

    An intelligent well written article, thank God there are some people willing to tell it like it is.
    The fact is because Ireland owes so much money, such a large deficit, people emigrating, people way over leveraged, Ireland facing the possibility of going bust in a few years, an oversupply of almost 350,000 properties, high wages which make Ireland internationally uncompetitive, this country is going down the Swany and in my humble opinion is not likely to climb out of this mess for another decade.
    The multi-nationals will be heading for India, people of Ireland don't fool yourselves.
    If people think that rents and house prices have already come down significantly, they ain't seen nothing yet.
    Spread the truth so that nobody else gets caught in the governments lies.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Liam Date: Tuesday May 25, 2010 @11:58AM

    This emotive comment does not appear to be based on any study of the figures.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: NAMAwinelake Date: Tuesday May 25, 2010 @07:01AM

    Well done to DAFT for taking the time and spending the money producing this largescale survey of rental asking prices so that landlords and tenants can get an idea of what is happening in the rental marketplace.

    As always, the figures are asking prices. Actual prices are held by the PRTB but because of the Data Protection Act they won't release figures (even ones which are aggregated by area and type of property which would not disclose identities!).

    A predictable set of results - as the prospect of any short-term appreciation in capital values vaporises landlords must seek to rely on rental income to pay for their investment. And with the value of an average property falling by €3200 per month (1.6% per month average for Q1, 2010 according to ESRI/Permanent TSB, average property price €200,000) no wonder renting is so popular with potential buyers. And with a negative short term outlook on property prices, expect the trend to continue - rents will firm or fall less than property prices.

    Are rental yields still important? Maybe, but given 60% of property in the State doesn't have a mortgage, on a marginal decision making basis many landlords may accept a return below the mortgage rate.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Liam Clancy MBA, CEO, Capel Abbey Property (Dublin City Centre) Date: Tuesday May 25, 2010 @12:23PM

    To answer your question, yes, rental yields are important for the economy....

    1. If we want to see a good supply of quality, well maintained, private accomodation available to tenants.
    2.If we want to avoid further increases in negative equity in the economy.
    3. if we want to see the taxpayer eventually unburdened of NAMA assets
    4. If we want to avoid a return to big local authority housing estates which have to financed and maintained by the taxpayer.
    5. If we want to see investors retaining their funds in Irish assets as opposed to moving them abroad to the detriment of the home economy.

    The return of investors to the property market is vital to overall health of the nation and the welfare of renters. Landlords are accepting poor returns in the short term because lead times of investment restructuring are quiet long.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: NAMAwinelake Date: Tuesday May 25, 2010 @03:47PM

    I'd agree with you that it is in everyone's interest to have a fluid market in decent rental properties though tenant legislation on minimum standards and the large amount of unmortgaged properties may distort things in the short term. Private investors are likely to be an important part in the supply of rental property so there must be adequate reward for their investment over the long term.


    But here's the problem for potential BuytoLet-ers today.
    DKM estimates that an average home will cost €136,000 at the bottom (see their latest EBS/DKM report on affordability here http://www.dkm.ie/uploads/pdf/reports/Affordability%20Index%20FINAL_press.pdf)

    an average home has what? 3 bedrooms? So let's say that a Buy-to-Let investor buys an average home for €140,000 and what would be a decent yield when the ECB base is 1%? 5%?

    So the investor requires a 5% yield ie €7,000 per annum. What would be a rule of thumb for voids? 1 month per year? So investors will need monthly rent of €636 and that's the national average. Only Ulster is below that price in Q1, 2010 (€596) - see above and most other areas are substantially above that.

    So if some of our commentators are correct (and wasn't Morgan Kelly predicting an 80% drop from peak?) in their predictions of future property price falls, then it would appear, would it not that rents are in for a severe further correction as well?

    So unless you can find bargains in the market, it would appear that now is not the time to dip your toes in the Buy-to-Let game as there is some way yet for prices to fall. And as uncomfortable as that is for those in the property business, isn't that the truth?

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  • Re: The Daft Rental Report Q1 2010

    Posted By: jo layey Date: Tuesday May 25, 2010 @09:36AM

    Real esate agents are guilty of lying to customers and demanding unrealistic rentals so they get a higher commission.There are a great deal of empties out there so renters should by pass agents and advertise in local papers to deal direct with landlords:offers of 40% of top of market rental prices are realistic.Too many people are honest fools and not paying realistic figures in a still unravelling economy.People should get off their fat lazy As and drive bargains with not only landlords but doctors,dentists,solicitors,tax agents,accountants and all those other greedy grubbers out there.Shake the trees and the apples will happily fall!

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Margaret Date: Tuesday May 25, 2010 @09:38AM

    Dear Ms. Kerby,

    How on earth do you think we will ever recover from the recession with reports such as this one being written. You are encouraging people not to buy homes and thereby prolonging the recession in this country.

    Margaret

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Adam Date: Wednesday May 26, 2010 @04:46PM

    Dear Margaret

    That is one of the most ignorant statements ive heard in a long long time. Encouraging people to buy now is what would drag out the recession for longer. Its simple people need to stop buying so prices hit rock bottom quicker and then a recovery can begin.
    If people believed the bullsh*t that politicians and EAs are spouting and did buy now they are going straight into negative equity. Telling the truth and getting gullible people like you to believe how badly off this country really is, is the only way to hurry up this recession. Believing the EAS and politicians is how this country fell head over tit in the first place
    If you were a ftb would you rather 1. not read these articles, buy a house, plunge into debt BUT help the bankers, EAs, government and the rest of the liars who got us into this mess or
    2. read an article like above, hold off and save yourself tens of thousands.

    great article by the way

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Doozer Date: Wednesday May 26, 2010 @06:54PM

    Ask not what your country can do for you, but how many houses you can buy for your country.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: IsRentingDaft Date: Tuesday May 25, 2010 @11:42AM

    This report should be re-named the 'Rough Guide To Rental' report. Advertised rents are not a true reflection of achieved rents. It always staggers me the amount of publicity these reports generate. It is a shame that the PRTB, the body that actually has the true rental figures to hand, do not publicise accurate statistics on rental data.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Happily Retired, North Co. Dublin. Date: Tuesday May 25, 2010 @02:35PM

    Ok this is an accurate snapshot of the present situation.
    But property should be viewed over the longer term.
    For example I live in a house that we purchased 30 years ago for €33k. Within two months it was worth €28k and fell steadily for about 6 years.
    During the recent bubble I could have sold easily for €850k.
    Now it's worth an optimistic €450k. I don't care.
    I now own my house and if I had spare cash I would invest in another property and take the long term view.
    The economy will get back on track again. It always does. It may take 5 to 10 years. But all will be well and the present problems will be a fading memory.
    Unfortunately the political mismanagement that got us into this mess will probably still exist. We need a reform of the political structure to ensure we have properly qualified politicans involved in National politics not local parish pumpism.
    While we are at it take a look at the Local County Councils role in the planning and building fiasco.
    In conclusion, land will always be a good investment. As somebody said "They are not making any more if it"

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Paul Date: Tuesday May 25, 2010 @08:11PM

    Happily Retired, North Co. Dublin

    "In conclusion, land will always be a good investment", say that to the poor sod that bought some apartment that will be 50 percent plus less then what he bought it for!, how on earth is that a good investment?.
    Buying at the correct price would be a good investment, so might as well wait and watch the prices fall another 20 percent plus, think of all you could do with that money instead of putting it into an over priced property.....

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Realism Date: Tuesday May 25, 2010 @06:02PM

    I agree with Happily Retired above.

    Sure things are bad at the moment but they will gradually improve.

    Too many people are emjoying the masochism of the doomsday scenario.

    Its nonsense, nonsense, nonsense.

    Economic cycles are all like a swing and a see saw.. They go up and down and up and down and round and round.

    Bet you a fiver property prices and rents start to go up in 2012.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Paul Date: Wednesday May 26, 2010 @06:08PM

    Yes of course prices will go up again, but they still have a long way to fall, as I said why buy a property now for 300K when you could get it for say 200K when this all finishes, that is 100K PLUS INTEREST of anything up 100K (if 40 year mortgage) depending on the length of your mortgage, so you could save 200K which will be yours to spend over the course of your life, this for me is a no brainer.....

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  • Re: The Daft Rental Report Q1 2010

    Posted By: paddy Date: Wednesday May 26, 2010 @10:45PM

    I will give you 10 to 1 on that fiver.....in fact if you want you can bet your house on it....I have 10 you are welcome to if you're correct.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: oldmanbitter Date: Thursday June 10, 2010 @11:43PM

    "Economic cycles are all like a swing and a see saw.. They go up and down and up and down and round and round.

    Bet you a fiver property prices and rents start to go up in 2012".

    You are forgetting one important factor - Ireland does not have an "economic cycle". It has throughout history been a poor country, whether under British or Independent rule, apart from the "Celtic Tiger", which is 15 years out of 5000. You are confusing Ireland with countries like the UK and US, which have a history of boom and bust and growing populations that need housing.

    Ireland has had it's 15 minutes of fame. It was based on a cheap, educated workforce and tax breaks, that attracted foreign investment and companies, that lead to a property boom. The tax breaks and cheap workforce days are gone and Ireland will go back to being a poor country with a low value housing stock.

    You say that you will bet a fiver that property prices will start to go up in 2012! With an oversupply of tens of thousands of properties, any fool can see that prices will continue to fall for the next 10-15 years and may never recover. Keep your fiver, because that might just be enough to buy a cottage in a few years.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: NO1FAN Date: Tuesday May 25, 2010 @11:19PM

    thanks,

    i was on the verge of buying in south dublin, with interest in 5/6 good properties that area, i have long been of the same belief of the author, that we're far from out of the woods just yet.
    none of us want this to continue, but i agree, at the current listed prices, to buy would be crazy. it potentially means another 5/10 years paying off a mortgage if i buy a house for 450k when i could wait and get it for 370.
    anyone with capital from the result of a sale etc may be able to rent from the interest on this capital.

    already, vendors have factored in a probable sale price of 400-430 on an advertised price of 450k.

    in my experience, estate agents are currently relearning their skill. they're starting to really do the selling of the properties, whereas during the boom, the houses sold themselves with the help of panic on the part of buyers trying to get on the property ladder.

    there is currently reasonable value out there, but it's not enough to justify parting with capital or stretching for a mortgage when if we wait another few months, we could potentially save 100k. this time, the panic is starting in the other direction. this report confirms that it's a good time to sell and crystalise the current value of your property.

    but that's just my opinion, and the opinion of a certain amount of others. so my hands are staying in my pockets. it's time for a holiday to france, ignoring the property pages on the internet for a couple of weeks, not gloating, but sharing our views and preventing more people lumbering themselves with big mortgages.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: marty 1 Date: Thursday June 3, 2010 @05:47PM

    First time buyers or investors face conflicting views about the market.
    For first time buyers the prospect of getting on the property ladder, setting up a new home and starting a family are tempered by a market that has very weak fundamentals and uncertaincy regarding value for money and asset value in the medium term.
    First time buyers should be aware however of some fundamentals which will affect the market over the next five years.
    1. The number of households will increase by about 800,000 over the next 5 years.
    2. No house building of any degree has taken place in urban areas such as Dublin, Cork, Limerick, Waterford or Galway over the past two years.
    3. The economy will improve and unemployment will fall albeit at a slow rate.
    4. Confidence will return to the market.
    The time to enter the market is always a difficult choice and the price of a 3 bed semi ( first time buyer house of preference)must reflect value for money and some asset potential.
    In my humble opinion I believe that the average cost of a 3 bed semi is still overvalued by perhaps 10% to 20% based on rental yields and average wage values.
    The problem with a stagnent market will be an undersupply of suitable units in the near term in urban areas when sentiment changes resulting in price increases.
    All in all the vast majority of us will miss the bottom and then scramble to buy in a rising market and just add to the recovery.
    For investors stay out until yields hit 6%.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: syd Date: Thursday May 27, 2010 @04:45AM

    there are clear messages for the different interested parties.

    for the buy to let investor - stay away from the market.

    for all the players who make money from the market (developers, buiders, banks, estate agents, legal people, newspaper ad departments,) your days of lying and hyping are over.

    FOR FIRST TIME BUYERS - YOU CONTROL THE PROPERTY MARKET. YOU ARE KINGS. DONT BUY FOR AT LEAST ONE OR TWO YEARS. PRICES WILL CONTINUE TO FALL AND YOU WILL EVENTUALLY BUY A PROPERTY AT A REALISTIC PRICE.

    for the existing property investor/landlord - keep your fingers crossed, its now outside your control.

    for NAMA - its only going to get worse.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Harry Murphy Date: Thursday May 27, 2010 @12:08PM

    A few commenters above make the point that the survey is based on advertised rather than agreed prices. As a landlord, I have to say that pricing my apartment even marginally above the market rate on DAFT when attempting to rent it will almost guarantee me no calls or takers.

    I normally start high (optimistically) and then reduce it down the price once or twice and the final advertised price is normally the price that I will receive. For my apartment, the DAFT average was within €4 of the price I settled for so while the figures may not be as exact as the PRTBs, they are not too wide of the mark either.

    There is no money in the game at the moment; that is for sure. In fact, it costs me €200 per month to rent my apartment to tenants and I must also cover the service charge, PRTB, etc, etc. . In his speech to the RDS yesterday, Matthew Elderfield pointed out that they must avoid an arrears support mechanism that would make the problem worse. I'd agree but levying additional taxes against those that continue to pay their mortgages could also compound the arrears problem.
    Roll on the Autumn correction!

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  • Re: The Daft Rental Report Q1 2010

    Posted By: paul Date: Friday May 28, 2010 @01:37PM

    Sorry did noboby tell you that there are 300 thousand properties empty and another 70 thousand people that can't pay there mortgage?...there is no market!

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Long on property Date: Friday May 28, 2010 @11:07AM

    Buy Now, Bargin prices, Once in a life time opportunity. Or.......be excluded from the market once again and doomed to renting for the foreseeable future. You have been Warned.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: CorkBoy Date: Friday May 28, 2010 @04:49PM

    MBA Liam's comments:
    "In central Dublin we are now already noting a decline in availability and choice for tenants. Less investment has reduced property availability and the leading indicator of a changing situation is the small increase in Dublin rents mentioned in the report. Therefore some relief for Dublin landlords in the form of higher rents looks likely very soon. For tenants this is not good news and it should be pointed out that Dublin City has a micro-economy where residential supply has always been tight due to the large student, medical and working popluation."

    At least to me, Liam, this seems like a selective look at the factors involved.
    In my own recent experience in ringing around in Dublin (and i'll happily stand corrected here by the masses) many landlords are willing to drop the asking price by 10% if you will commit to 12months contract. So, much like the sales market, i don't think that asking prices are as reliable an indicator of actual rental prices as previous years.
    You are also overlooking the now NAMA-held apartments in Dublin City which have not gone to market yet - take a look at the docklands area. I don't believe that central Dublin availability being squeezed will necessarily result in significantly higher rental prices in the medium term. With potential civil service pay cuts, general tax increases, and wage competitiveness - people can & will migrate a short distance from the city center out along city transport routes to soften their rental outlay.
    With a recessionary mindset, i'm not sure that many people have been "moving up" the rental ladder in terms of considering paying more than they do right now. If anything the push has been towards getting better accomodation for the same money, or the same accomodation for less. The psychological aspect of "protecting what you have" seems to be foremost in people's minds currently - i think that will take a while to change again.

    I guess what i'm saying is that there are a lot of points to be included in this discussion - not all of them are as cut-and-dried as you suggest.

    Remember, for those wishing to get back to the "good ol' days" of landlords milking tenants dry - past performance is no indication of future performance... no matter how much you might want it to be!

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  • Re: The Daft Rental Report Q1 2010

    Posted By: NO1FAN Date: Friday May 28, 2010 @06:23PM

    Still a renter's market. teo sides to every story. certain estate agents i've spoken with have told me continually that prices have started to go up and warned me against missing the boat. continuously over last 9 months where i've seen the prices gradually dropping.

    as one newspaper columnist pointed out, despite the fact that there's always a spike upward around april and may, you can't say that the market has turned once again judging by the fact that there are more people viewing houses.

    as she pointed out, it's what couples do when they've nothing better to do at the weekends- go for a nosey at an estate they are interested in, or just comparing the decor in the show house to thier own house a few doors down the street.

    people aren't gonna panic buy again for a long time. there once was a decision between wasted money on rent where it could be paying a mortgage. now things have changed, if renting, you can move whenever you like subject to a months notice etc, no worries about estate agents, furniture removals etc

    . just pack up and move to some other location which suits your life best, even another country if that fits the bill. one thing's for sure, not so many people rushing in to find themselves for ever stuck with a lifetime noose of a mortgage paying off someone else's mortgage who had the sense to move off the sinking ship.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: "In the long run we are all dead" John Maynard Keynes Date: Saturday May 29, 2010 @07:00AM

    While I agree that prices have further to fall, prospective buyers also need to factor in the future cost of borrowing, and wheter or not credit will be available.I believe when the market bottoms out there will be a rush to secure credit; the banks wont make the same mistake twice. many will simply be refused loan approval. If your in a position to buy.... have secured loan approval and have found a place you could call home.. then buy. I agree with 'happily retired', prices will go up and down again. One of the major reasons that property prices went crazy in this country is that a house ceased to be viewed as a home and began to viewed in terms of an investment. I am not saying that buying a home is not an investment, but I am saying that it ought to be a lot more than simply a financial investment. As for the comments stating: "why buy now when you can get it for 100k at a later date", says who? sure the property might be 100k cheaper but that is no good to people who cannot secure loan approval, as may be the case if there is a rush to get credit. The relevent question to ask yourself would be: Can I maintain a mortgage at my current rate of income? if my income were to change through job loss for instance, is the prospective property in an area were a room/s would let reasonably easy to help maintain the mortgage? If you can answer yes to both of those questions then why wait, paying rent ( someone elses mortgage) when what your paying out could be your own? Just a thought. I'm sure many will see my views as being flawed in light of the apparent pending doom which will befall Ireland... Portugal.... the entire Euro-zone. I guess I can just see that all of these people wating for the market to bottom out may not have factored into their thinking the reality that interest rates are only going one way.... up. This being the case, any " savings" made on buying a property at the bottom will be effectively neutralised by the increased cost in borrowing.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Anonymous Poster Date: Sunday May 30, 2010 @08:19PM

    To the above "In the long run we are all dead" John Maynard Keynes
    You said :

    "This being the case, any " savings" made on buying a property at the bottom will be effectively neutralised by the increased cost in borrowing"

    This is one of the most ridiculous things anyone has ever siad on here, if I buy at the bottom I will somehow be no better off buying now because interest rates will go up?????.

    Interest rates go up for EVERYONE, so my lower mortgage bill will pay LESS interest then the person who will buy now at a higher price.

    I'm not going to go into the whole credit thing you are harping on about because people can't get mortgage approval now never mind in the future.
    Banks will only lend to people who can afford a mortgage at the correct price NOW, in the future it will be the same, the day of people getting a mortgage they can't pay are over, this is another reason prices will continue too fall also.


    People do not want to buy now because they want to have some standard of living and don't want to pay off an over priced house when they could be spending money on there life, cars, holidays etc etc.... simple.

    People have been suckered in once by lies from politicians, bankers, media, auctioneers, estate agents who blew up prices....this will not happen again for a long time, no matter what people say on here

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Long on property Date: Monday May 31, 2010 @10:41AM

    You may have a good reason to buy now but don't be fooled or confused by arguments to buy based on the current low nominal interest rates. For first time buyers what really counts is the REAL interest rate. This is equal to Nominal Interest Rate less Inflation. However as house prices are decreasing by 1% a month, the Real interest rate for FTB's is close to 15%. Only when the market bottoms out will REAL interest rates become affordable.

    Check the internet for a full explanation between real and nominal rates.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Aztec Date: Monday May 31, 2010 @07:35PM

    I'm probably going to get ridiculed like MBA Liam here but despite the Anglo bailouts, the jobs losses in pfizer, Quinn going bust and the propect of another harsh budget on the horizon the mood in Dublin, anyway, doesn't feel as gloomy as it was 6 months ago. In my own circle of family of friends people are getting on with it. The conversations around dinner tables are not about property but how Ireland can better itself through industry. Exporting goods and services. Entrepreneurship etc.

    My message it to forget about property for the next few years. Enjoy the birds chirping in the garden, the hive for the honey bee and a nice glass of red.

    I dont know about you but Ireland during the boom years was a crass,garish place. If this is the medicine we need to take to become a progressive, modern, civilised society then pour me another spoonful!

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  • Re: The Daft Rental Report Q1 2010

    Posted By: kev Date: Tuesday June 1, 2010 @04:38PM

    im looking at an apartment in a tourist town in the west of ireland as a home and it also has excellent rental pottential for short term letting. im a first time buyer with a decent long term job. im 22. the agreed price is 150k. its a 2 bed and my long term objective is to build at home. a 5 year fixed rate of 4.35 and monthly repayments of 520euro after mortgage interst relief. as a 5 year home/investment plan does this sound like a good idea.. can i make money on this apt over 5 years or am i being naive..

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Paul Date: Wednesday June 2, 2010 @07:36PM

    Maybe if it was a house i'd say very slim chance, seen as its an apartment forget it!, there 10 a penny

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  • Re: The Daft Rental Report Q1 2010

    Posted By: john h Date: Thursday June 10, 2010 @03:52PM

    The property market in this counrty both commercial and residential is dictated by what happens in Dublin. It always starts and finishes there. It always creates a 'ripple' effect. So keep an eye on it if you are thinking of buying in any other part of the country. You should also stop considering a home to be an investment. It should be regarded as a home first and foremost if you can afford it ,and stop worrying if it will fall in value over the short term.What's the point in putting your life on hold waiting for a dream home when someone could get in ahead of you? In the long term you will be quids in. Paying rent is a mugs game. You won't even own the dust on the walls.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Paul Date: Saturday June 12, 2010 @06:12PM

    "Paying rent is a mugs game"

    Because I have paid rent the last 5 years I actually could have a life for the next 10 or so years,I'll save over 100 K on the price of a house and another 100 K in interest, god renting is such a mugs game isn't it?. Buy at the right price, why rush?, there is no market and there will be no market for years, prices will continue to fall, say yourself a fortune and just wait, there will be no magic up sing, the country is adrift in a sea of debt....

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Melissa Date: Friday June 4, 2010 @03:38AM

    Hi

    I am interested in buying a 3br cottage in North Tipp near the Shannon and am wondering when would be a good time, I do not live in Ireland so am also watching the exchange rate from Aus $ to Euro with interest?

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  • Re: The Daft Rental Report Q1 2010

    Posted By: gisela coutts, alberta canada Date: Monday June 7, 2010 @05:14AM

    i'm reading the article and all the replies with great interest. my son will be starting at ucc this fall and we are presently in cork to look for a rental or an rent to buy ( my preferred choice).
    can anyone point me to an " honest' estate agent , bank, landlord etc. or is that an oxymoron nowadays.
    according to some of the numbers mentioned, could i negotiate approx. 40% off the asking price.on a flat or house or am i dreaming.
    any advise to this foreigner would indeed be greatly aprreciated.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: A foreigner too Date: Monday June 14, 2010 @12:39PM

    "could i negotiate approx. 40% off the asking price.on a flat or house"

    10 - 20% is more realistic in Dublin. Dont know about other places, but definately not asking price.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: RAYMOND Date: Saturday June 19, 2010 @02:59PM

    I think 20 to 30% more is still to come. Ireland is only going one way. How do people think that Ireland is going to come out of this next year, people are crazy.

    Raymond

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  • Re: The Daft Rental Report Q1 2010

    Posted By: ROSS Date: Monday June 28, 2010 @07:12PM

    "Paying rent is a mugs game."

    Thats the sort of attitude that has Ireland in an absolute hole as regards property in this country, Ireland should be moving towards more European norms as regarding renting like Germany or France where only a minority of households rent. John, the bank is your landlord until the day you clear off every mortgage repayment.

    Rents have further to fall and if the government introduces a property tax then I can see more rooms been rented out. The Irish property market is in deep s**t for at least the next two years and if the property tax is brought then that will further exacerbate the fall in property prices.

    Oh well our cultural obsession with property has come back to haunt us a nation. I aspire to home ownership myself but I'm not prepared to be ripped off. We need to get rid of the cultural snobbery that is attached towards renting in Ireland, then again rental laws need to be modernised by the government. BTW I have centre right political views and I'm far from been a loony leftie.

    I save quite a bit in money from renting myself as I've been renting for the last few years, I've €30k in the bank and I'm looking to save another €10k, I don't have the stress of worrying how I'm going to pay the bills at the end of the month because unlike a lot of the celtic cubs I didn't lose the plot and Join the Celtic Tiger fuelled madness of property.

    I can just see the following quotes coming:

    "Rent is dead money"

    "Is that what we fought for to be a nation of tenants?"

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  • Re: The Daft Rental Report Q1 2010

    Posted By: PC Date: Wednesday June 30, 2010 @12:42PM

    The rental market may have some landlords struggling however there are allot of established landlords that didn't pay bloated prices for their property and have been reaping exorbitant rental income as demand fuelled the market.
    With the property market halving it’s to be expected that rents should follow although it is occurring at a slower rate. I have always been dubious of the buy to let market as it’s sold to many as away of acquiring multiple properties over a mortgage period and having them pay for themselves. That's a great business model during financially stable times however during recessions you need to have capital to offset your loss and amateur landlord simply cannot cope with this.
    I would sympathise with anyone in financial difficulty however many of these “amateur landlords" don't want the hassle of tenants and just want their mortgage paid for them. Many drive away tenants as they fail to compete with the shifting prices. I myself moved a in 2009 and saved €300 a month. Rent control should have been brought in years ago and although I know allot of landlords would grumble it would be for the benefit of the country as a whole. High house and rental prices make us uncompetitive and will ensure wages are kept high.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: RAYMOND Date: Thursday July 1, 2010 @10:40PM

    If you asked me 5 years ago i would have said owning your own home is the way to go , but in the current climate renting is the way to go. There is two much uncertainy regarding the housing market. The euro is going down the tubes and quiet possibilty it might not be there in a few years or it will be worth nothing.

    Raymond

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  • Re: The Daft Rental Report Q1 2010

    Posted By: ROSS Date: Saturday July 3, 2010 @12:58AM

    Pc, there were rent controls in Ireland up to the 1980's I think but then a court case was taken by a landlord which forced the government to change the law meaning that rents have since been determined by the market. Germany has rent controls, I wonder are rent controls inked to inflation in Germany?

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Mark Date: Thursday July 8, 2010 @06:54AM

    Anyone try to get a mortgage recently? Doesn't the fall in prices become rather theoretical if banks are reluctant to provide new loans, as widely reported. While house values may have dropped, this is of little use if purchasers cannot buy. Indeed, difficulties in obtaining mortgages prevent some individuals from getting their own homes and in this way, the banks may be fuelling further reductions in house prices.

    However, celebrating the changing market is artificial - like going to the summer sales with no money in your pocket - it might be great value but you still can't buy anything !

    Some individuals, who extol the benefits of renting, may have no other alternative and may be confined to temporary accommodation for the foreseeable future if they cannot secure mortgages. Indeed, as interest rates climb, the monthly cost of buying a particular house is rising and I can imagine a situation where such increased mortgage costs outweigh reductions in the value of the property.

    Thus, as the reduced cost of buying is being partly offset by the increased cost of repaying mortgages, will rent levels stabilise or increase as a result of difficulties in getting loans?

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  • Re: The Daft Rental Report Q1 2010

    Posted By: paul Date: Thursday July 8, 2010 @12:17PM

    The only thing keeping rents from falling through the floor is rent allowance that is been paid to people on welfare,I believe that all the accommodation that is rented 50 percent or so is supported by the state.
    Eventually when the government can't keep borrowing to fuel this madness (i'd would hazzard a guess this will be one of the last areas FF will touch until they have no other option as I would suspect many in the party hold mini property empires which they rent out!).
    And people will start to get mortgages again when the risk is at an acceptable level for the banks to give them the money, if this means house prices falling another 20 percent well it will happen. The cheap credit that fuelled the last 10 or so years property boom is gone and will not be coming back, so basically banks have limited funding to give out for mortgages, so they can only give loans when the risk of defaulting is small, simple.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Lukas Date: Thursday July 8, 2010 @10:48AM

    But when prices fall further it will be easier to buy/get a mortgage. It is very good in long term that banks don't give mortgages to people without money, this was the cause of crisis. It should be a must to have 20-30% of home price. Everyone will benefit from this.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: Anonymous Poster Date: Saturday July 10, 2010 @10:55PM

    i just want a opinion since the recession is it showing signs of recovery thats commerical property losing or gaining

    • Reply to this message
  • Re: The Daft Rental Report Q1 2010

    Posted By: Chris Date: Monday July 12, 2010 @08:38PM

    Hi i havejust arrived back from a year in OZ where there is no recession. My wifes family is from Roscommon and we have been looking at houses in Leitrim and Roscommon. We have about 150k and dont want a mortgage. I have been surprised by the smug nature of some auctioneers who are showing us properties at 130-150K and their refusal to go and approach owners with offers of only 10 % less than asking price. They say "i am not going to offer that amount for this house,it was worth 180k a year ago". Are they allowed to refuse to make offers for us? And what planet are they on? They must have made so much money off us in the past they dont need sales anymore.

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  • Re: The Daft Rental Report Q1 2010

    Posted By: NO1FAN Date: Monday July 12, 2010 @09:38PM

    ok, this week they say we're on the road to recovery- the recession is over.....
    has anyone noticed over the past 6 or 7 months, every couple of weeks, there's a different angle. one week, the news will say that house prices have stabilised, that there was no decrease in prices for a particular period, fuelling media debate for a couple of days about how we're on the way out of a bad time for the economy.........

    ..........couple of weeks later, we hear realistic economic forcasts from european banking sectors telling us, we haven't seen the half of it yet, and in turn fuelling more media debate, involving economists telling us house prices must fall another 20% before we turn the corner.

    why do we continue to listen to the same 'banking sectors' and 'experts', none of whom predicted the current state of Ireland's economy.

    i really am perplexed by the number of my own associates, who tell me 'now's the time to buy...' am i, or are you going to take the advice of an unqualified colleague etc, who waffles out a cliche he's overheard some other waffler present to someone else.

    there are several factors to take in to account when deciding to take advice on what or where or when or whether or not to buy-

    -just like in your workplace, the country's full of bluffers, who will readily dish out what they think is welcome advice
    -these bluffers will delight in claiming the credit if their advice somehow turns out to be correct (50/50 chance, remember)
    -based on tis advice, you borrow 300k for a house which next year is worth 200k, the bluffer will be nowhere to be seen, or will delight in your misfortune.
    -basically take in all the information and process it. i've been doing so for the last year, and compared to being in the same position 5 years ago, there's no need to panic. as one of the contributers pointed out, the banks aren't giving out the money, and several other factors are causing house prices to continue to drop. so what i'm saying is, don't panic. the prices aren't gonna move upwards anytime soon, possibly next year, and possibly further again.
    -the latest information to hand in this weeks sunday times, mentions the possibility of a 'double dip' relating to uk and us house prices. economists here often refer to these as indicators of how our markets are heading, perhaps with some foundation.

    as for me, i'm saving my money. my unqualified prediction (but having processed a lot of factors and information) is that theres a round of more steep drops about to happen to property prices, especially in dublin.

    and based on that, i'm gonna hold off. i'm going to buy in the area i wish, but if a hold off for a year, i can also afford to have a nice golf gti, or 5 series beamer or perhaps a porsche boxter on my driveway. (car prices may drop again also)

    well, that's what i think anyway.

    so good luck to you.

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