Why are 2 bed apartment rents not dropping more?

Theboinkmaster

I'm in South Dublin looking at taking on a 2 bed apartment lease however I'm surprised at the rate of decline - I'd have thought it would be much sharper.

There seem to be thousands of unsold units sitting empty - why aren't these being rented out, therefore increasing supply and dropping rents?

For example there a quite a few ghost estates in Carrickmines/Sandyford - I doubt many of these will sell over the next year or two so will these just be left vacant?

Perhaps towards the end of the year the penny will drop with developers that no recovery is iminent and instead of leaving as asset to waste they'll rent them out?

In particular I'm looking at 2 2 bed in Loretto Abbey Rathfarnham. 9 months ago I think these were going for about €1,400pm and are now listed at €1,200. However I was hoping towards the end of the year to get one for about €900 or am i mad, they'll never drop that low? But if all the empty apartments in South Dublin went on the rental market tomorrow surely the price would drop to that, if not lower?

Any thoughts?

gibo_ie

developer starts to rent out these properties they immediately become secondhand homes and there are tax and stamp duty implications that go along with this.
Also currently a lot of developers are in so much debt trouble that the banks wont even let them rent out the properties anyway.
as for €900 for a two bed anywhere in Dublin you really are dreaming!!
1100-1200 would be a fair price in most parts.

AARRRGH

Theboinkmaster wrote: »

I'm looking at 2 2 bed in Loretto Abbey Rathfarnham. 9 months ago I think these were going for about €1,400pm and are now listed at €1,200. However I was hoping towards the end of the year to get one for about €900 or am i mad, they'll never drop that low?

I think a 14% drop in 9 months is pretty good.

They may reach €900, but not for a few months I would think. Also, you could also contact them and haggle a price. My old flatmate went to see a one bed for 1k and haggled him down to 800...

Mr. Incognito

Give it a month- when the college students leave you'll pick one up for 1100.

quozl

I think the actual rents have dropped by more than the asking prices on daft.

You can now negotiate a decent discount from what they're asking, that was not previously the case.

Me and the missus just rented a 3 bed, pent-house (well, it's only 4th floor), apartment on the junction of donnybrook and ranelagh for 1200 euro per month, even inclusive of heating. I think it's lovely, though only one bathroom so I'd guess that caused issues for them in renting to sharers.

They were asking 1700 in March, and 1400 last week. We got it for 1200. Rents have come down massively imo through this year alone. The Budget, rising unemployment, tempoary removal of TRS, 2nd property tax, these all mean people need to actually rent things out, instead of just letting them lie idle.

As a contrast, the 1bed apartment I owned until 2 months ago would be costing me about 1150 a month in mortgage. I'm very happy to be renting currently.

oflahero

Plus, having monitored the price histories of a lot of south Dublin apartments recently, I can see that landlords have now pretty much pegged asking prices, factoring in the reduction that the new assertive tenant in today's market is inevitably asking for.

Example: this time last year: ~1350... 1300... january this year: 1250... 1150... oh crap everyone's asking for a reduction now... 1200. And there the price stays.

SoupyNorman

Theboinkmaster wrote: »

I'm in South Dublin looking at taking on a 2 bed apartment lease however I'm surprised at the rate of decline - I'd have thought it would be much sharper.

I'd take issue with this...why would you have assumed so? The general masses seem to go along with what papers/media say about the property sector and like yourself are expecting prices to drop to the floor. The housing market isnt like a supermarket where prices can drop overnight.

Prices may fall to the level you'd expect, but may not fall to that level for a year or more. You cannot sit there and feel cheated that the price you see is not the one you want, thats not the way it works. My advice to you is to go view a place you'd like and make an offer of what you want to pay, you maybe surprised!

Dont sit back on your laurels.

gurramok

gibo_ie wrote: »

as for €900 for a two bed anywhere in Dublin you really are dreaming!!
1100-1200 would be a fair price in most parts.

Nope i'm not, i'm renting a 2bed in D4 for that 900 yoyo's.

In fact, Daft throws up a fair few 2beds at less than a 1000 euros right now.

Bricks&Mortals

Heard on the radio that Daft have a report out today - www.daft.ie/report

16% over the last 12 months on average apparently. I'm sure prices will drop further but I think you will be a long time waiting for another 300 off a current 1200 price - that's 25% and demand is relatively high in those areas of dublin and is likely to remain so, so honestly i think you're wasting your time wishing on the moon.

If you want to bag a bargain you have to go in and negotiate/haggle aggressively - armed with your research (other prices, no. of properties on the market etc) make the case for a lower rent (where appropriate).

Be proactive, don't waste time waiting around.

whizzbang

gibo_ie wrote: »

developer starts to rent out these properties they immediately become secondhand homes and there are tax and stamp duty implications that go along with this.

I'm not sure this is correct, I thought I heard of some developers renting out properties but then still being able to sell them as "new" without stamp duty. Not sure 3exactly how but I believe it is happening. If I bought a "new" place only to find otu it had been rented before I think I'd be annoyed though!