In a steadying rental market students must do their homework
16th Aug 2011
Rachel Breslin, Welfare Officer at UCD Students Union, commenting on the latest Daft research on the Irish property market
Crippling cuts to the grant system, a €500 increase in the student contribution charge and with fees looming on the horizon, this year looks set to be a very challenging one for students financially, and these latest rental figures offer little comfort. Unlike previous years, as students face into a new academic term they will encounter a largely static rental market, rather than a falling one, with prices around some of the country's main educational institutions increasing.
From the release of CAO offers on August 22nd onwards, tens of thousands of incoming students are expected to flood the rental market looking for accommodation for the year ahead. But what can they expect to pay? Students have benefitted in recent years from a 25% decrease in rents since 2007, but this year face a market which appears to have plateaued somewhat. As with all prospective tenants, finding a suitable location is key; trying to balance lecture timetables and late hours in the library with a long commute is difficult, but combined with the benefits for incoming first-years of living with or near fellow students it becomes an even greater determining factor. Moving away from home and beginning college is a daunting experience for all concerned, but securing "a roof over their head" for the year at an affordable price makes the whole process a lot less intimidating.
Continuing students can expect to pay broadly similar rates as last year, although it is crucial that students begin looking for a property as early as possible. It is on the whole more economical to group with others and rent a property together. However, it is important that students consider the number of people they share with carefully and thoroughly investigate the market as there is a great disparity in trends and rental prices overall between property sizes and the cost of individual room-rentals. The statistics show that larger houses do not necessarily mean a lower rent per person, so students should consider all their options in this regard.
Third level students will be further hit by the increase in rents in cities. Rental prices in Dublin, Cork, Galway and Limerick cities are all higher than they were this time last year. These areas are home to Ireland's universities and as such this will have a disproportionally high impact on students compared to others in the rental market. Almost ironically, this September will see the introduction of much publicised and controversial changes to the non-adjacent grant. Students living within 45km of their college no longer receive a higher maintenance payment, which has the knock-on effect of inducing students living within 45km to try to move closer to their college to save on transport costs.
It is not all doom and gloom for students however; static rent prices allow for better planning of rental expenditure, not just in advance of the coming academic year, but for the duration of their course. In addition, the second quarter has seen a significant increase in the number of properties entering the market. Amidst greater competition landlords looking to secure tenants are now trying to appeal to the student market which they may previously have avoided. Take advantage of this greater choice by shopping around. More properties available simply means that students should more thoroughly investigate what's out there. The mixture in trends emphasises the need for students to research fully and inform themselves before agreeing a price with landlords.
The PRTB (Private Residential Tenancies Board) reports that more than 40% of students have had their deposit "unfairly held". This figure is much higher than the industry average, and in order to tackle it students must make themselves fully aware of all their rights and responsibilities. Students Unions, USI, Threshold and the PRTB are all excellent sources of advice and information for student tenants. Always sign a written agreement in advance of moving in, and subsequently ensure that your tenancy is registered with the PRTB. Students who have had their deposits held illegally and have failed to get satisfaction from discussing the matter with their landlord may contact the PRTB to avail of their dispute resolution service.
An area of interest in the overall rental market is the possible introduction of a tenancy deposit protection scheme. This scheme, operating currently in England and Wales is a free custodial service offered by a state-approved body which manages deposits and any subsequent disputes, and is funded by the interest accrued on the deposits. The rental sector has grown significantly in recent years, and following on from the obvious benefits for aggrieved tenants and landlords, such a development may boost the sector further.
Earlier this month, AIB released research showing that a student's average weekly disposable income has fallen by 36% in the past two years, from €86 to €55. While previously decreasing rental prices had counteracted some of the financial cuts students encounter and the fall in available part-time jobs, this year a steady market with increases in rent around many educational institutions will likely add to the financial strain. Unfortunately, the stabilising rental market in the face of a drop in income may see an increase in students bowing to insurmountable financial obstacles to their education, and drop out of the system completely. Students must budget carefully and make sure they are aware of all the financial supports available to them.
The August rush is already beginning to gather pace so do not delay on securing accommodation. Being familiar with the current rental market situation means students know what prices to expect, and makes it easier to recognise value for money. Growing up, the class of 2011/2012 enjoyed the full force of the Ireland's boom but this year many will struggle under the impact of the bust. This rental climate may exacerbate struggling students' financial difficulties but also provides opportunities for students who have informed themselves and researched all their options fully. The golden rule for students planning on renting accommodation is look early, look extensively and look carefully.
Rental Price Index
Stock and Flow of Rental Properties
Snapshot of Rents Nationwide
Discuss This Article
Re: The Daft Rental Report Q2 2011Posted By: NAMAwinelake Date: Tuesday August 16, 2011 @08:44AM
Well done to DAFT.ie for expending the money and effort in shining light on the current rental landscape. And to Rachel for bringing to the fore issues facing students as the start of the new term looms.
In truth rents have stayed flat since the start of 2010, 18 months ago (DAFT index was 75.9 then and 74.7 today). That is borne out by actual private rents now analysed monthly by the CSO. Investors might say this is just rents coming back into some proper sort of equilibrium after the capital appreciation of the boom years was no longer available.
Still, with average rents of €851-1259 for a two-bed in Dublin, that still looks very high compared to just over €500 per month in Belfast.
And of course in Belfast they have a proper security deposit scheme which seems to work very well indeed for both landlord and tenant.
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Re: The Daft Rental Report Q2 2011Posted By: ek Date: Tuesday August 16, 2011 @09:22AM
Hi what would a 5 bed house, 2 bathroom on a 3 quater site lovely condition , outside wicklow town on the n11, well mantained would be the right rent .
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Re: The Daft Rental Report Q2 2011Posted By: Tony P Date: Tuesday August 16, 2011 @04:54PM
No news is good news, it's nice to see stability in the rental market in these troubled times. As soon as values come into line and offer investors a fair return, the property market should begin to wake up. However, with social welfare getting the chop this autumn, I assume rent supplement will reduce average rents.
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Re: The Daft Rental Report Q2 2011Posted By: Anonymous Poster Date: Tuesday August 16, 2011 @09:08PM
only Rathdrum,wicklow rent never goes down
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Re: The Daft Rental Report Q2 2011Posted By: Connell Date: Wednesday August 17, 2011 @11:35AM
I'm not so sure how accurate your values for an average student accommodation prices in Maynooth are.
I understand that these values are taken directly from your website, but my personal experience with accommodation in Maynooth would suggest that you may not be getting a very accurate figure.
Firstly, a lot of the properties advertised on your website based in Maynooth do not want student tenants unless they are post-grads or some don't want students at all. I have found that most accommodation that does accept students charge higher rents.
Also, when these values are taken will also of be of huge relevance to the accuracy of the figures. There is always a huge rush to get property in late August/September due to the commencement of the new university year and prices on the ground reflect that increase in demand as people feel they need to get their accommodation fast and rush into a decision.
The last thing which I think will be of relevance to your figures is the fact that rents in Maynooth in the summer time can up less than half the price during term time.
Getting a single room in Maynooth for €279/month would not be the average price, that price would be at the very low end of the market and exercised by very few.
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