Are accommodation prices coming down?

jozi

I'm just wondering have the prices for accommodation come down since we entered into this economic crisis?

The house we are renting was pretty expensive to start with and with the end of our lease in sight should be try and get it cheaper?

While im here, can someone tell me how much letting agencies charge to maintain a dwelling? Would we be better of approaching the landlady about renting directly from her?

The_Conductor

According to DAFT- supply of rental property has been increasing between 10 and 15% month on month for the past 4 months, and the trend is continuing in this manner. Simple economic principles would indicate that with greater supply, prices should fall to meet demand. In practice, prices are 'sticky' insofar as landlords, particularly those who purchased in the boom, still haven't gotten it into their heads, that in many cases, its simply not possible to fully pay a mortgage with rental income. Rents are falling though- its now pretty normal for tenants to request an annual rent review with the intention of having their rent decreased to prevailing rates in the area (previously reviews would have been requested solely by the landlord with the intention of increasing the rent........)

Times, they are a changing........

gurramok

Yes they are. I've been keeping tabs on 2 bed apts in Dublin city and suburbs since the start of the year.

The amount of the above available at 900 average rent instead of 1000 previously in all locations central and suburb has shot up from only a handful initially to the majority now.

aquascrotum

We successfully renegotiated our lease mid-term to get over E200/month reduction at the weekend.

So yes, prices are dropping. Tbh I felt genuinely sorry for our landlord - we had him over a barrell.

The_Conductor

aquascrotum wrote: »

We successfully renegotiated our lease mid-term to get over E200/month reduction at the weekend.

So yes, prices are dropping. Tbh I felt genuinely sorry for our landlord - we had him over a barrell.

Better a EUR200 reduction, than a vacant apartment tbh
God only knows how long it would take him to find a new tenant with the amount of vacant properties at the moment.....

grizzly

In my area in Dublin 7, I've seen the average price drop between €100 > €200 for 2 bed houses*.

One thing to remember is that many landlords won't advertise lower rates, so don't be afraid to negotiate a lower rent during a new rental / lease renewal.

aquascrotum

smccarrick wrote: »

Better a EUR200 reduction, than a vacant apartment tbh
God only knows how long it would take him to find a new tenant with the amount of vacant properties at the moment.....

That was our argument. The scary thing is our landlord isn't some bigtime investor - he's a bloke my age who took a chance and went for a buy-to-let mortgage.

We discovered during our negotiations that he was putting over E600/month on top of our rent to cover the mortgage before the reduction.

Made me realise that there are a lot of folks like him who must be sailing very, very close to the wind at present, and that this is still just the tip of the iceberg. I don't know many average joes who took a chance who can afford to be out E1800/month on a mortgage on an empty property.

ixoy

I took a quick survey of prices there yesterday and most rentals in the area are now less than what I'm paying (they weren't several months ago). I think I should begin negotiating in the new year for a reduced rent as we've been well-behaved good tenants so far.

jozi

So there's room for us to negotiate a reduced price of monthly rent.

The house we live in is really nice, just re-decorated, nice area (between drumcondra/phibsboro) only bad thing is the price. It's quite expensive for a 4bed house with tiny box room. I dont know what the norm is now for such as house or what it's going to be like mid feb when the lease is up. 2 of my flatmates have already said they will be looking else where for cheaper accommodation unless this gets cheaper. As with Ixoy, we are also well behaved tenants, on the last inspection they even commented says they house was spotless as usual.

I was thinking of approaching the landlady about renting directly of her rather than through an agency. Does anyone know what the rate is agencies charge for maintaining the a house?

grizzly

jozi wrote: »

So there's room for us to negotiate a reduced price of monthly rent.

The house we live in is really nice, just re-decorated, nice area (between drumcondra/phibsboro) only bad thing is the price. It's quite expensive for a 4bed house with tiny box room. I dont know what the norm is now for such as house or what it's going to be like mid feb when the lease is up. 2 of my flatmates have already said they will be looking else where for cheaper accommodation unless this gets cheaper. As with Ixoy, we are also well behaved tenants, on the last inspection they even commented says they house was spotless as usual.

I was thinking of approaching the landlady about renting directly of her rather than through an agency. Does anyone know what the rate is agencies charge for maintaining the a house?

I think it's normally 10% or €100 per month.

I wouldn't bother going directly to the Landlady. Just get the rents of an identical properties in your area, the more the better. Put it all down on paper. Then ask for a meeting and offer a fair amount based on the going rate. If they aren't willing to meet your rate, say you're ready to move (but be ready to go if they call your bluff).

The_Conductor

grizzly wrote: »

say you're ready to move (but be ready to go if they call your bluff).

Given the supply of alternate accommodation- finding elsewhere at the drop of a hat is not a problem......

jenizzle

Has anyone tried to ask for a rent reduction before the lease is up?

mikemac

In May 08 my lease was up. I'd been there 2 years so this was the end of the 2nd annual lease.
I was a model tenant of course :cool:

My landlord increased the monthly rent by 50 euro, not a big jump by any means but it wasn't justified. Tried my best then they wouldn't budge, I was only looking for a freeze, not even a reduction

I left and it was still on the daft 6 weeks later. Maybe it was let immediately but I doubt it. Gonna take a long time to make back the money for the vacancy period even if the tenant was paying a higher rent then I was....

Point I'm trying to make is many landlords are stubborn and would rather see a property go empty then for less then what it's "worth" in their head. This applies to rent equally as trying to buy or sell a property.

Be sure to ask and a landlord won't drop unless you ask. And get as much as backup as you can, it only takes a few minutes on daft

aquascrotum

jenizzle wrote: »

Has anyone tried to ask for a rent reduction before the lease is up?

Yes.......

aquascrotum wrote: »

We successfully renegotiated our lease mid-term to get over E200/month reduction at the weekend.

jenizzle

aquascrotum wrote: »

Yes.......

Ah, I decided that you had said that your lease was up *facepalm*

How did you approach it? Big speech about how great tenants you were or just straight up "I want to pay less rent"?

okmqaz42

Just decided to rent a 2 bed house, rents in the area started at €1400, signed the contact today for €1050. Had a dutch auction with two landloards and I won cheaper rent.

Arathorn

When our lease was up for renewal we got it reduced from 1700 to 1500. Nice house and nice area but now i'm starting to think its still too high, especially if somebody in the house wants to move, might be hard to fill the room

The_Conductor

Arathorn wrote: »

When our lease was up for renewal we got it reduced from 1700 to 1500. Nice house and nice area but now i'm starting to think its still too high, especially if somebody in the house wants to move, might be hard to fill the room

Its incredibly difficult to fill individual rooms at the moment (because the number of people offering rooms to let has mushroomed- a combination of better awareness of the rent-a-room scheme, and genuine worry about finances).

If you are taking the whole house and responsible for the entire rent- negotiate a significant discount. If the landlord is accepting the responsibility for filling individual rooms and the inherent risk of not being able to fill them- keep quiet...... 4 bedrooms in a 4 bed house might typically rent for up to 30-40% more than the entire house (depending on who was taking the risk associated with non-occupancy).

Ps- in the current climate 1500 a month is very expensive- can I ask what the area is, and what the house is? Just curious.

aquascrotum

jenizzle wrote: »

Ah, I decided that you had said that your lease was up *facepalm*

How did you approach it? Big speech about how great tenants you were or just straight up "I want to pay less rent"?

Well we asked for a meeting on the premise that we'd both had a paycut (which we have), so basically it wasnt feasible to continue living there as there was cheaper stuff round the corner (admittedly not as big).

There was also an identical house across the road for E200 less. So we put it to him that if we couldn't get a reduction we'd be giving notice (regardless of losing damage deposit) and pointed out that if we went 1) the house would be empty for probably at least 3 months in the current market and 2) the best rent he would achieve from new tenants would be matching the rent of the identical property across the road.

It was a no-brainer. And tbh if he'd said no we would have left, because put simply we couldn't afford it any more. And also we have probably gone above and beyond the call of duty as tenants - the house is in better nick now than it was when we moved in. Try persuading the homemaker gf that it isn't our bloody house to be spending money on...

shoegirl

smccarrick wrote: »

Simple economic principles would indicate that with greater supply, prices should fall to meet demand. In practice, prices are 'sticky' insofar as landlords, particularly those who purchased in the boom, still haven't gotten it into their heads, that in many cases, its simply not possible to fully pay a mortgage with rental income.

Thats because they probably can't afford to charge beneath a certain point.
Secondly, since at least 1/3 of the rented sector is basically subsidised by rent allowance, such landlords will simply set the rent at the maximum RA subsidy to max out their profit. I suspect that RA dependence will grow to as much as 2/3 of the sector due to unprecedented levels of job losses, so effectively, RA subsidy becomes the baseline rent, which is what seems to set minimum rent levels.

Its an artificial floor for rents, so to speak, which is bad news if you pay your own rent out of your own pocket.

In my own experience, landlords are not settings increases and not gouging for extras either, not in the last few months I find, anyway, this could well change in the next year if they want to pass on extra costs.

The_Conductor

shoegirl wrote: »

Its an artificial floor for rents, so to speak, which is bad news if you pay your own rent out of your own pocket.

Its not generally bad news- there is a revised circular expected in January with new RA ceilings (some people are speculating that a decision to reduce them by as much as 25% may be in the offing).

cmcsoft

Rates have definitely come down. People are now in a position to bargain. A friend of mine was going to move out of a bedroom apartment after Christmas but when he went to give his landlord notice (saying he was going tomove to a house for the same rent), the landlord offered to reduce the rent. Very good time for renters in my opinion.

Antigone05

Was going to post a new thread but then i saw this one.

My girlfriend rang me today in work to tell me that our next door neighbors apartment is up on Daft for 100euro less then what we pay.

The complex (small, 12 apartments) are all identical, in no way different, fittings and all.

My lease ran out last month..

2 questions.

1. Should the agents (CastleKnight) have contacted me about the lease running out or is that up to me?

2.Do i have every right to ask for the price on Daft? Can i ask to move next door for 100 less?


Thanks

Arathorn

smccarrick wrote: »

Ps- in the current climate 1500 a month is very expensive- can I ask what the area is, and what the house is? Just curious.

It's a 3 bedroom house in d14. The house is a good location and very nice. When we renewed the lease it was about the average price for the area, looking at it now its slighty on the higher end of prices.

johnnyskeleton

Antigone05 wrote: »

Was going to post a new thread but then i saw this one.

My girlfriend rang me today in work to tell me that our next door neighbors apartment is up on Daft for 100euro less then what we pay.

The complex (small, 12 apartments) are all identical, in no way different, fittings and all.

My lease ran out last month..

2 questions.

1. Should the agents (CastleKnight) have contacted me about the lease running out or is that up to me?

2.Do i have every right to ask for the price on Daft? Can i ask to move next door for 100 less?


Thanks

Ask for the next door's rent for your current flat. If the landlord says no, move next door. Its not entirely clear whether the agents are for both apartments or just one, but if they are for both I would be surprised if they didn't give you the discount. If they refuse and they wont rent the next door flat to you, you can contact the PTRB, and I think you can ask them for a rent review downwards in line with the current market rate (which is at least €100 less).

Agent J

Been watching Maynooth/Dublin rents for the last while. Definatly have come down and will keep dropping for the next few months anyway.

ronbyrne2005

http://www.rte.ie/news/2008/1211/inflation.html

Rents also fell by 6.1% during the month.

layke

I knew this would happen, as soon as the construction dried up all the Polish and the like start to head off home leaving loads of vacant properties. Well this is good news for me I've been waiting for this for a long time, when the housing hits rock bottom is when I buy my house. At least I can say I bought it for what it's worth not the over valued rip off prices that we have had previous to this.

The_Conductor

layke wrote: »

when the housing hits rock bottom is when I buy my house. At least I can say I bought it for what it's worth not the over valued rip off prices that we have had previous to this.

First of all- its impossible to call- when "bottom" has been hit. In an international context- the most compelling example to use as a comparison to the Irish residential property sector is the bubble experienced in the Japanese commercial property sector. They have now 'recovered' in price somewhat, and are now trading at values last seen in 1988. Even this must be clarified somewhat- as the prices even there, have started to slip in the global mess (despite real interest rates in Japan (and Switzerland and elsewhere) being firmly negative in real terms.

It could very well be that the headline 'price' associated with property ownership, might very well only be one faucet of the cost of ownership. There are a lot of aspects that people do not want to consider.

How do you determine what an 'over valued rip-off' price actually is? Worth is determined by what its purchaser is willing to pay for an item or good. It does not mean that those involved in the transaction are in a rational frame of mind- simply that as far as they are concerned, property x is 'worth' blah to them......... The OECD reported Irish property prices as between 20-25% over-valued in 2001. Thats fully years ago. We are now experiencing actual deflation- as opposed to inflation. Irish GDP is expected to shrink by between 6 and 8% next year- and household inflation in most recent figures- despite what everyone might, is about -.6% (annualized at roughly +2.4% but falling rapidly). In a situation such as this- what is a reasonable value for property? I certainly wouldn't hazard a guess- would you?

Keep in mind- the 'over-valued rip off prices' we had previously, were in conditions of 100% employment- where a brickie could easily expect a 120k+ salary- and even apprentices were on 600-800 a week. If you add things like this into the equation- our newfound position of zooming unemployment (easily expected to reach 9% by the end of 2009), real falls in actual income and a total lack of credit- it could be argued that the economic fundamentals alone supported 2006 prices- whereas the 2009+ prices do not have the same fundamentals to prop them up.

What criteria would you use to try to determine the 'worth' of a property to you? How do you see these criterion evolving as all our situations change?

I'm genuinely interested.

S.

Sofa_King Good

Took a 1 year lease last Feb on a 1 bed apt, 1400 a month, now being advertised for 955.

jozi

I've not been keeping an eye on daft yet, will be nearer to the lease finishing up in Feb.

What would people say the following house is worth:
The place was done-up before we moved in, we are the 1st tenants since so everything is in good condition.
There's a kitchen with everything you expect, not massive but by no means small. Very big sitting room with open fire, conservatory out back, washing machine dryer, back garden with access to walled private garden only accessible by the houses backing on to it. There's room on the drive for 2 car and on street parking. 4 bedrooms on 1st floor (1 with en-suite, 1 is the box room, the other 2 are double rooms, all lots of storage space) and a bathroom with bath. and a 5th room up in the attic, it's a dormer room and takes up nearly the whole floor plan of the house.
It a nice quiet area in Drumcondra, near train, buses etc.

I'll not say how much we are paying as I know its to much and has to come down in the new year.

Jozi