Rent or Buy Decision Swings Towards Home Ownership

John McCartney, Lisney

27th Nov 2007

John McCartney is our guest blogger, commenting on the lastest Daft research on the Irish property market.

With 2007 drawing to a close, and as all sides draw breath in anticipation of Budget 2008, there has never been a more interesting time to 'read the tea-leaves' of the property market. Property accounts for so much of our wealth that numerous indicators have been developed to keep us updated on market trends. Among these, the Daft rental reports are unusual in that they cover both rents and capital values. Interaction between the rental and sales markets is complex but, judging by the latest data, we are now entering an interesting period indeed.

Rental supply down, demand up
Recent rental trends show a marked contrast to the early years of this decade. Average rents fell by 17% between 2002 and 2003. However the market has recovered since then and year-on-year rental increases have averaged 9.9% over the last 12 months. As ever, this can be explained by supply and demand. Lettings agents report that the supply of good quality rental accommodation has tightened. In part, this reflects higher interest rates and tougher credit conditions for investors. But it also reflects the fact that some landlords were enticed into selling-off their rental properties by the exceptional house prices being achieved in 2006.

Rent Affordability Trend, Q3 2008

While supply is down, the demand for rental accommodation has grown. Rising interest rates and faltering house price growth last Autumn created a 'deflationary psychology' in the minds of would-be buyers. For the first time since 2001 price falls became a realistic possibility and this undoubtedly caused some house hunters to play safe and rent until the market settled down, thereby adding to rental demand. This combination of tightening supply and burgeoning demand has led to a sharp increase in rents, as shown in the Daft rental index.

Static rates, falling prices and rising wages mean improved affordability In contrast, however, property prices have fallen. After last year's bumper house price growth, the Daft.ie index shows that asking prices are static, while the ESRI/PTSB index indicates that closing prices are down 4.9% since January. Combined with the ECB keeping base interest rates on hold since June, the costs of servicing a new mortgage have eased. At the same time, net incomes have risen by anything up to 9.25% due to pay increases and tax reform. The impact on affordability has been significant. Mortgage affordability has steadily improved over the course of this year, particularly for first time buyers who benefit from enhanced mortgage interest relief. This trend is illustrated on the right hand axis of our graph using data from the EBS/DKM Affordability Index. At the end of 2006, the average first time buyer's mortgage accounted for 26.4% of disposable income. By October 2007 the figure had fallen to just 23.8% - an affordability improvement of 10%.

Buy-or-rent calculations changing
This leaves us in an interesting place. Generally, households have two tenure choices - they can rent or buy. Over the course of this year the first option has become less attractive due to rising rents. Meanwhile buying has become more appealing due to improving affordability. If this continues, some households will inevitably switch from renting to buying. All else equal, this should lead to a slowdown in rental growth and a pick-up in house prices.

It is difficult to predict exactly when this switch-back might occur, but two conditions would probably have to be in place. Firstly, the absolute gap between mortgage repayments and rent levels would need to become reasonably narrow. However, repayments would not have to sink all the way down to rent levels - most people would be prepared to incur some premium for a home loan because paying down a mortgage leads to ownership of a valuable asset. A second condition is that expectations about future house price growth would need to be positive - no matter how high rents go relative to house prices, buyers will be reluctant to commit if they believe that residential values are going to fall further.

The first of these conditions already appears to have been met. Daft figures show that, while loan repayments remain higher than rents on average, the gap has become quite narrow. Indeed, in some areas like West Dublin where yields are highest and growing most strongly, this gap has been eliminated. Here typical first time buyers face a net loan burden of €1,034 per month for one bed apartments, compared to average rents of €1,038. However, it is too early to say that the second condition - a public perception that house prices have bottomed out - has been met. Average prices fell by 1.3% in October, and despite many economists' assurances that market fundamentals are supportive of medium term house price growth, buyer confidence remains shaky.

Looking forward, I expect rental growth to ease as yields become more challenging. Indeed, this is already happening - annual rent increases have fallen from 16.9% last June to 6.6% in October. In contrast, as buying becomes relatively more attractive, house prices should gain renewed support. Expect this to happen first in areas like West Dublin and Limerick City where high yields make owner occupation more compelling. However this process will not fully take hold until confidence in the housing market recovers. The timing of that is as much a matter of psychology as economics.


HIGHLIGHTS:

The Daft.ie National Rent Index
The Daft.ie National Rent Index

Annual rate-of-change in rental inflation, 2005:q1 to 2007:q4
Annual rate-of-change in rental inflation, 2005:q1 to 2007:q4


SNAPSHOT:

Snapshot
Average Rents across Ireland in Q3 2007

Discuss This Article

  • Re: The Daft Rental Report Q3 2007

    Posted By: safashouses Date: Tuesday November 27, 2007 @02:21PM

    Interesting report, but how come there is no mention of the fact that there are twice as many places available to rent on daft now than there was in April? Or the fact the availability has increased 50% in a little under 2 months?

    We are heading to oversupply, so rent prices are going to drop in the near future.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: corkbased investor Date: Tuesday November 27, 2007 @04:06PM

    How true. Rents were rising rapidly until August, now to me they appear to be falling. I am unable to get 90% of the monthly rate for apartments that were gone on the first phone call last June/July.
    What is the lag on the Daft report versus real time?
    Last apartment I rented took 2 price drops and 3 weeks to rent.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Tom Date: Wednesday November 28, 2007 @08:32AM

    I'm not sure how you guys read that rents are falling - make sure you're not confusing the rents with their rate of change. The rate at which rents is increasing is slowing, alright, but rents are still going up, make no mistake.

    I would imagine there is no lag with these figures, i.e. October figures are for the month of October... is that what you meant?

    Team Daft, can you help?

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Mark Date: Friday November 30, 2007 @07:21AM

    Yes Tom, I have several houses rented out, with two having just been re-let at a 30% higher rate than 2006. Another has just come available and I can't stop the phone ringing (wish I could because its annoying at this stage).

    Based on supply and demand, I must increase rates and even if the rental market softens, the tenants will stay for a few years since people hate moving. Even if extra houses come available inertia will protect against falling rents. Thus practical, rather than theoretical, experience strongly suggests that rents will rise and not fall, especially as new investors have effectively left the stage and are unlikely to return for at least two years.

    All of the would-be first-time buyers now occupy rented houses and as the supply of new rented accommodation is at a virtual standstill, increasing numbers of tenants are sending rental rates skywards. Happy Days for landlords and a grave error for those forecasting doom and gloom!

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: The Frog Date: Tuesday December 4, 2007 @02:15PM

    Agreed... over supply of rental property will bring about the downfall of the Irish property market forget everything else. As new developments come online next year builders who haven't sold already will continue to hold out and rent along with private investors etc. Competition amongst landlords will increase forcing prices down. The margin between rental income and mortgage repayments will become so wide that people will no longer be able to hold out and will have to sell bringing about a forced correction. Those with large portfolios of property who bought post 2002 will be the worst affected. Increases in interest rates will prolong the agony.

    • Reply to this message
  • APARTMENT NEEDED

    Posted By: clarence cole Date: Tuesday December 11, 2007 @11:55AM

    Hello
    Am clarence i love to know if there is any available Apartment Room in dublin.and i love to know the price of it, i want you to know that am coming there for a little project under my boss company called collerplcstore..i want you to know that the payment of the Apartment Room will be send throught the irish dublin account only.please get back to me as soon as possible so that will can start arrangment i will spend 4 weeks ...i will be more grateful to hear from you back..here is my contact number...+447031819406...you can reply to my email showing below:-
    collerplcstore.com

    Thanks
    clarence

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Anonymous Poster Date: Wednesday November 28, 2007 @08:21AM

    Hello? Nice article but what about the danger of rising interest rates? Please also check Wells Fargo on google for latest news ;)

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Anonymous Poster Date: Wednesday November 28, 2007 @11:37AM

    after all I think it is a criminal act to encourage people to buy into the current property market - same for the rents as soon as the market collapses the rents will of course also go down rapidly

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: breaking even is a necessity Date: Wednesday November 28, 2007 @09:42PM

    Rents are generally controlled by interest rates, as long as rates stay high rents will stay level, remember investors are looking at long term, but they are not going to take less rent for a property than the amount required to pay the bank each month - in other words they will rent at the amount it requirs them to service the loan and service charges - nobody is going to rent a property while incurring losses each month unless they are insane. They would be better off leaving the property idle. I would personnaly prefer to rent at a little below the going rate to good clients than get top dollar from the wrong client

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: safashouses Date: Thursday November 29, 2007 @11:27AM

    An here I was thinking that rental prices were based on demand for rent? So it makes sense for an investor to not rent a place for €1000 as his mortgage €1500 is?

    Surely €1000 is better than nothing at all?

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Cee Date: Wednesday November 28, 2007 @06:44PM

    John McCartney from Lisneys expects that "house prices should gain renewed support". Mr McCartney is paid to say this but I doubt that he really believes it.

    Just today, Jim Power from Friends First is predicting a 10% fall in house prices in 2008 following a 7% drop this year - see http://www.rte.ie/business/2007/1128/economy.html?rss

    This is a cumulative drop of almost 20%.

    Again, Mr Power is paid to talk pries up or - as in this instance - to talk prices down by less than they are really falling.

    Actual selling prices of houses in Ireland ( as opposed to asking prices ) are heading rapidly downwards. To use Mr McCartney's expression, I believe that they will "bottom out" when 35% to 40% is knocked off current asking prices.

    I am no prophet of doom and gloom or even a begrudger. I own three house myself worth EUR2.2m in 2006 and probably EUR 1.2m in 2009. I've seen it all before. It always ends in tears.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: howzat Date: Wednesday November 28, 2007 @07:01PM

    Hi,

    There´s a pretty major point on a misleading appearance in this report.

    The whole story about how affordability for buying and rental prices are supposedly converging are illustrated on a chart that has two different Y-Axes....so that the convergenge shown could be real or imaginary.

    There is no relationship between the Daft Rental Index (baselined a 100 on an arbitrary date) and the EBS monthly affordability index (based on a percentage of disposable income, or similar). Showing the two of them as converging is highly misleading. I hope it wasn't deliberate.

    howzat

    Presenting these two as if

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Banker Date: Tuesday December 4, 2007 @02:50PM

    The reason why Rents are rising is because a lot of rental property has come off the market looking to be sold.

    But its all failing to sell so prices will continue to fall and some will try and rent it again causing rents to fall aswell.

    Its a well known phenomenom. The market is a mess and getting worse by the day.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Cee Date: Tuesday December 4, 2007 @11:42PM

    The excellent "WORLD IN 2008" published by the Economist every year is just out and is available freely on the web.
    If you look at http://www.economist.com/theworldin/forecasts/COUNTRY_PAGES_2008.pdf you will see that Ireland has the highest GDP in the EU with almost USD 63,000 per capita. For example, UK is only about USD 46K.

    However, if you look at real PPP in brackets beside the nominal figures, it shows Ireland at USD 45K or about 30% below nominal. This is the "paper inflator" in Ireland. It has pervaded everything from electicity ptices to wages to restaurant prices to house prices and rents. They all need to fall by this figure of 30% to bring us into equiblibrium with the fundamentals of the western world economy. Ireland can then become competeitive again and we will not lose 500 high value, high tech medical jobs such as happened today in Galway.

    The housing market is not in a mess but is in the painful readjustment to this reality. It is like gravity and cannot be defied.

    By the way, the huge falls in bank shares happening at present is nothing to do with sub-prime. These were only 2% of Irish lending and if 30% go wrong, the effect oh the bank's property porfolio is negligible at just 0.6%. The reason for investors marking down bank shares 30% or so is the impending respossession crisis where tens of thousands won't be able to pay back their loans or will just throw back the keys.

    This happened in the US in October 1929 when the banks had lent massively to ordinary people to create a hyped up paper increase in the value of shares. Over the next 3 years, small investors in the stock market could not pay their loans which they had obtained for their shares and they just threw them back at the banks. The real crash happened in the US in 1932 when the banking system collapsed. That is the year when US GDP fell by 50% and unemployment went to 30%. We are heading for the exact same scenario here - just a diferent paper asset - and the major bank sharholders know this. They are getting out of bansk fast before the crunch comes in 2009 or 2010.

    Funny that you don't hear any of the analysts from big institutions saying anymore that prices will rebound in 2008. The should all be prosecutued for criminal recklessness for the largest deception perpetrated against the Irish people since the British took our land in the 15th and 16th centuries

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: SUNCOAST Date: Wednesday December 5, 2007 @08:29PM

    As a landlord can assure you rents are not falling - just let an apartment in Kilmainham and had 7 offers - and probably about 30 calls - tenants all complaing too many people going for not enough apartments. My rent is 11% higher than what I was charging 6 months ago.

    Rents in Dublin are still quite cheap comapred to UK cities and also the price of property in Dublin

    It was the buy to let investors in the UK that stopped the last crash - as when prices dropped yields increased and they entered the market - if prices drop her by 30 - 50% - I would do the same as bargains will become available....

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Howzat Date: Thursday December 6, 2007 @01:42PM

    Good luck to SUNCOAST on renting his places, but the DAFT.ie rental inventory shows significant increases nationally and for Dublin and the CSO shows rents declining.

    Maybe it's not all so great.

    Besides, aren't rents finally now ever so slightly above 2002 levels?

    Howzat

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Fred Date: Friday December 7, 2007 @06:08PM

    SUNCOAST - your wish may be granted. A developor just down the road from me in Castleknock (Capel Developments - Rathbourne) has just slashed new apartment prices by €100,000 or 22%. GOOD LUCK!!

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Foreigner Date: Tuesday December 18, 2007 @08:48PM

    What do you think about the increased interest tax relief from 2008? Will it have an impact on stopping the prices going down? For firs time buyers couples it can be quite temting to get eur 333 less repayment each month. I think many people who are quite settled here and who are currently renting will make the decision about buying something next year. The prices have gone down and they became just more normal so more people may think about buying something instead of renting. In my opinion it is the end of very comfortable times for landlords.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Fred Date: Thursday December 20, 2007 @11:32AM

    It is a fact that Ireland is experiencing the largest population growth in Europe. The supply of new housing in the country over the last 18 months has fallen notably and is expected to decline further. As a result, the supply of new houses is inadequate to cater for both natural population increase and immigration.

    The resulting accommodation shortfall will give rise to higher rents and/or higher purchase prices, às increasing numbers of people will have to queue for the small number of dwellings which builders will construct in the near future or which investors (if any) will put out to rent.

    If landlords hold onto their existing investment properties, the supply of houses for sale will be further limited, thus forcing purchase prices up. Equally, if owners decide to sell, the number of dwellings available for rent will be minimal, thus increasing monthly rates.

    The budget changes will have minimal impact overall as the measures introduced will not go far enough to prompt those convinced of continuing falling prices to buy. However, the clever househunters, who had already decided to purchase early in 2008, will take these changes as their cue to get a home and will beat the rest of the pack.

    Other people, awaiting further reductions in house prices will be disappointed as both monthly rents and purchase prices will increase.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: kilkenny faggot Date: Thursday December 20, 2007 @11:47PM

    an estate agent for sure, the biggest clowns in the country.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Siobhan Date: Friday December 21, 2007 @11:16AM

    And we all know what you are!!!

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: kilkenny faggot Date: Friday December 21, 2007 @02:24PM

    how do you know im an estate agent?

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Siobhan Date: Thursday December 27, 2007 @05:46PM

    The name you are using is a bit of a giveaway kilkenny

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Paul Date: Friday December 21, 2007 @07:15PM

    Per above report; rents are not falling. The increase in rent inflation may be slowing however an increase is still an increase (not too mention above national price inflation). Good quality rentals will continue to remain in demand for the foreseeable future.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Praveen Date: Saturday December 22, 2007 @01:42PM

    Rents appear to be falling to me.Around half of people who are renting are not from ireland. So buying a property in an uncertain market is like a huge gamble. Now for renting if a landlord is renting an apartment for say 1100 eurospm and if he fails to get a suitable tenant for one month he will loose 1100 euros that is same to the situation if he had rented the property one month earliar for 1000 eurospm(12 month multiplied by 100= 1200 Euros) So if he rents the property immediately for 1000 Euros he will still gain 100 Euros at the end of 1 year contract.
    Rents are going to fall immediately if the supply is more than demand for just 1 month. As of today there are 3500 landlords in dublin only looking for tenants for letting plus an additional 1500 looking for people to share. An average dubliner with 1-4 years of experience earns around 32000 euros pm so after tax take home salary is around 2400 Euros pm. How can he afford to pay 1200 euros for a one bedded apartment? I personally feel rents are going to fall sharply in the first quarter of 2008 as they have gone out of reach of majority of people.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Anonymous Poster Date: Sunday December 30, 2007 @09:59AM

    Rents have definately gone up significantly and demand is still very high. In Cork it has been as much as one third depending on area in the city. There is a lot of people holding off buying because of the slow market and are renting instead. That includes many people who can afford a mortgage.
    In the case of buying, my advice is to buy now, even though few will listen to what I say. House prices may have fallen by say 5% according to surveys but if someone is willing to sell now you can get up to 10-15% off the maximum price the house was ever at. This is significant. At some point in the future people will decide to buy again and probably all at the same time. This has happened before. Any price falls will be cancelled out and prices will start increasing. Also, even already there is a lot less new houses being built to the extent that less houses are being built than are required. This can only be good news again for greedy developers in the long run.
    By holding off, I think people are going to generate yet another spike in prices rather than putting house price growth on a sustainable path.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: John Date: Thursday January 3, 2008 @09:56PM

    Well the situation in 2008 seems a bit different to me. House prices have crashed since they were overpriced and the mortgages had become unaffordable for most of the population . Rents are going to follow the same trend in 2008 since they have gone out of reach of middle income group people. Now sharing seems to be the only choice left. landlords will increasingly find it difficult to rent houses .They will have two choices 1.Keep the rent high and rent it for sharing. 2.keep the rent reasonable and rent it to a single or couple. The growth of irish economy has slowed down.It is the time for the rental market to cool down as happened with the house market. I dont see any reason for a person to rent if he can pay the mortgages. He/She is renting since the mortgage is out of his reach and now when rents are going out of reach either renting out of city or sharing will be the options left.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Bill Date: Sunday January 6, 2008 @10:18AM

    John, three points in reply.

    Firstly, a single-digit reduction in average house prices doesnt constitute a price crash. Sorry.

    Secondly as people will always need accommodation, it is simplistic to suggest that individuals who cant afford mortgages wont buy a home. Lenders, househunters and parents have exhibited considerable flexibility to facilitate those who ordinarily could not afford housing and this will continue in the future (especially for those whose career patterns suggest that they will be future achievers in society).

    Thirdly regarding rental levels, immigrant couples (unlike Irish people) are prepared to share with other households in order to pay higher monthly rents. As the supply of accommodation falls and as the number looking for homes rises, rents will continue to increase and Irish couples, who would ordinarily not be able to afford the higher rents, will be forced to share with other households.

    Housing is not like jam and marmalade, where if the price of one increases, consumers can opt for the alternative. Accommodation is an absolute necessity and those without their own homes must pay market rates, be it for purchasing a house or paying monthly rents. Nobody can refuse to follow both sections of the market and those who think that they can will experience severe accommodation difficulties.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: John Date: Monday January 7, 2008 @09:34PM

    Bill,

    Just wait for 3 months and you will see how prices will crash. I know two of my friends looking and just looking for someone to share their apartment for last 3 months. Those landlords who are thinking they can charge more rent than mortgage are going to realise the ground truth and are going to be net losers. The population growth in dublin is largly due to immigrants and how many of them are in white collor jobs able to afford 1500 eurospm?
    Agreed housing is a neccesity but that doesnt mean people are going to pay mare than they can afford. Just check daft website and you will come to know that there are apartments which are waiting to be rent since months.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: kelsey Date: Sunday January 6, 2008 @08:01PM

    kelsey is fun yes no

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: fadalease Date: Sunday January 6, 2008 @10:04PM

    Eh..........no kelsey is a muppet and no fun at all

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: idiottje Date: Monday January 7, 2008 @10:12AM

    I think the recent announcements by Davies and others should be considered. Also, we need to look at who is renting,and why. The vast majority of renters (in the Capital and most major towns) are foreign nationals.The fast majority of these renters are couples, or grouping of couples, with at least one person working in the construction industry and the other in the services sector. We all agree that New Home starts are down 47% from last year, so we should assume that means that a lot of these renters have no job in Ireland. If they have no job, and are not working here, then there is less requirement for staff in the services sector.
    The economy is not going to go bust (we will have growth, just 2% or so) but European wide inflation will have to be curbed by the ECB. This will mean higher interest rates. The current sub prime fears are also not completely played out either. Banks are unwilling to lend to each other because they know there is a huge amount of sub prime out there, but they do not know which bank is carrying it. So banks are unwilling and actually unable to provide mortgages.
    Also, the buyer on the street is in no rush to buy. They have seen the house prices fall, and the general consensus amongst first time buyers is that the budget changes make no real difference, and that they can afford to hold on for several more months. The feeling is there is another 20 to 30% of a drop to come, so they will hold off. It is going to be a case of seeing who blinks first. And with first time investors facing negative equity ......
    There are still at least 4 to 5 more months to go before we see what happens with both rents, and house prices, as well the economy in general.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: joe Date: Monday January 7, 2008 @05:53PM

    The claim that 'the vast majority of renters (in the Capital and most major towns) are foreign nationals' is unsupported by expirical evidence. Irish people still outnumber immigrants and the propensity of New Irish to share accommodation suggests that a high proportion of rented dwellings are still occupied by indigenous persons.

    The assumption that the decline in house-building 'means that a lot of these renters have no job in Ireland' is questionable. Apart from the fact that other construction activity (infrastructure, shops, offices and factories) remains strong, there is huge demand for factory employees (with captains of industry having difficulty until recently in hiring staff), so its unlikely that mass emigration will occur tomorrow. We have full employment, classified as anything less than 6 per cent of the labourforce and, as with most markets, redundant employees will simply avail of opportunities in alternative sectors.

    EU inflation will not necessarily 'have to be curbed by the ECB'. Whilst M. Trichet has historically pursued anti-inflationary policies, the current rate results from one or two areas, notably oil and the ECB will be aware that raising interest rates will stunt growth and have little effects on the price of a globally-traded commodity whose production is governed by a range of external non-economic factors.

    I've just put a house in Dublin on the market and am amazed at the response. I did'nt expect to hear anything from the estate agent until the end of January or start of February and on this basis, I find it hard to believe that 'there is another 20 to 30% of a drop' in prices to come. Indeed, none of the messages on this page actually explain why prices are going to fall.

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: Badgeman Date: Wednesday January 9, 2008 @04:56PM

    Well, Joe,

    Maybe I can help explain it you.
    House prices are going to fall a lot further .....

    a) because they are ridiculously overpriced.

    b) because the Irish economy is heading for recession.

    Quite easy when you think about it!

    • Reply to this message
  • Re: The Daft Rental Report Q3 2007

    Posted By: jimmythemonk Date: Tuesday March 4, 2008 @12:10AM

    Funny these articles- talking up a market that is clearly in decline is soooooooooo sad ! Does anyone really belive that this advice or view is truly independent.......haven't we had enough of people with vested interest telling us what we should or shouldn't be doing....... six months on and this article can be seen for what it is......a final throw of the dice by a desperate sector that has along with the banks fanned the flames of the property bubble to the point of recklessness over the last 5 years........ rents are falling, supply is increasing, another 40,000+ plus units to be added this yr that won't be sold.... that's right builders are having to rent out properties to meet their overdrafts.... so increased rental supply will instead further pushing down prices......... desperation is a powerful paymaster.......6 more months and you will be renting at even larger discounts than present......why buy when rents are falling making it cheaper relative to a costly mortgage that at best will stagnate whilst the value of the property falls.......sit tight for 4 yrs, save the surplus of rent paid versus higher mortgage that would have been paid in the same period and watch your purchasing power increase........the driving seat is free in the property sectorright now and like a big nite out the smart ones would rather take a taxi than be foolish enough to climb behind the wheel ........but like a smart socalite that you are you don't want to get behind the wheel after a binge that has been the property market for the last 10 yrs, better to grab the taxi.....with the proverial "to rent" roof sign...safely head to a place where you can hibernate for a while,away from the incessant "noise" swirling around in your head and the slighly unsteady feel derived from a few too many ...... wake up refreshed have a bit of a scratch on the surface when the effect of the glutony have worn off, grab a bit of nourishment in the guise of some well worked savings that you built up from the rent versus mortgage payments and then and only then get behind the wheel......safe in the knowledge you are compus mentus, liquid free and can clearly see the road ahead, the direction is yours but this way you wont stress when the inevitable checkpoint looms ... safe in the knowledge that you will not have the keys confiscated and a nasty court appearance.....instead you can smile, say "howya" and continue on.....with plenty in the reserve tank..........climbing that gentle but stead rising slope ahead that will be the eventual recovery 5 klicks down the road......the choice is yours .....spend it wisely and the best of luck !!

    • Reply to this message

Respond to Article

Your Name: (Optional)

Subject:

Message:

We ask you to keep your comments on-topic and suitable for a general audience. The article you are commenting on is entitled: The Daft Rental Report Q3 2007

Please Note: Your message will not be displayed on the website until its contents have been checked by a member of staff.