Dublin rental prices up by over 7% in second quarter

mathie

Rental prices in Dublin rose by 7.5% in the three months from April to June, the latest Daft.ie rental report shows today.

Prices outside of Dublin rose by 1% over the same three-month period and Daft.ie says that the average rent is now €825, compared to €792 the same time last year.

Daft.ie said the increase in Dublin rents is due to a 43% fall in the number of available properties to rent, with 2,395 properties available at the start of this month compared to 4,212 at the start of August 2012.

Other cities outside of Dublin city have seen a combined 27% fall in the number of properties available to rent in the last 12 months.

Today's report shows that rental prices have risen in Cork and Galway by 2% and 3% respectively, while they fell by 3% in Waterford and were stable in Limerick.

Ronan Lyons, Daft.ie's economist, said the gap between Dublin rents and much of the rest of the country is a trend seen consistently over the last 12 to 18 months.

http://www.rte.ie/news/business/2013/0819/468945-daft-ie-rents/

Noticed this myself in the last few months that rental prices seem to be on the up (Bray, Co. Wicklow)

murphaph

No no, there must be some mistake. Rents couldn't possibly be on the up, nor could prices. Just wait for all the repossessions to start, then we'll see etc. etc.

gaius c

murphaph wrote: »

No no, there must be some mistake. Rents couldn't possibly be on the up, nor could prices. Just wait for all the repossessions to start, then we'll see etc. etc.

It's an obvious bubble. You'd think people would have learned to spot them a bit better after what we've been through.

listermint

murphaph wrote: »

No no, there must be some mistake. Rents couldn't possibly be on the up, nor could prices. Just wait for all the repossessions to start, then we'll see etc. etc.

Well repossesions havent started at any pace yet. So to be fair no one knows whats going to happen with that elephant in the room.

Do we have dublin specific statistics on mortgage arrears ?

That would be a better indicator of how the market will play out eventually.

Moonbeam

rent allowance also went up in most areas of Dublin,I wonder which caused which to happen.

stevedublin

Moonbeam wrote: »

rent allowance also went up in most areas of Dublin,I wonder which caused which to happen.

rents went up, which forced the government to increase rent allowance.

Penguino

Simple case of supply and demand

Huge increase in tenants looking for properties in Dublin and increase in purchasers looking to buy

gurramok

And the bedsit legislation did not help. It helped tenants with better accommodation but it might have forced landlords who were unwilling to convert to exit the market.

And the passing of the property tax by landlords onto the tenants into their leases will skew the price up a bit till at least June next year.

OMD

gaius c wrote: »

It's an obvious bubble. You'd think people would have learned to spot them a bit better after what we've been through.

After bubbles prices drop below their long term average. They then rise relatively quickly to their long term average and stay at that level. As prices in Ireland already dropped below their long term average it is reasonable that we are now in stage 2 where they revert to their long term average where they will probably stay.

Calling tiny rises in the price of property a bubble is a bit odd

techdiver

This country really depresses me!

Where else would you get a completely dysfunctional economy with massive unemployment/personal debt and emmegration and yet, the property market is still so vastly over priced for the average person with decent earnings.

What's even more depressing is the fact that a few steps can alleviate the issue, such as repossessing defaulting mortgages and zero government interference in the property market.

This country really need to wake up to the fact that high house prices is bad for the economy!

Idbatterim

when are they going to start building again?!!! the vacancy rates in Dublin are virtually non existent, rents are up quite considerably over the past 1.5-2 years!

camphor

listermint wrote: »

Well repossesions havent started at any pace yet. So to be fair no one knows whats going to happen with that elephant in the room.

.

Repossessions are more likely to put rents up rather than down.

who_ru

Idbatterim wrote: »

when are they going to start building again?!!! the vacancy rates in Dublin are virtually non existent, rents are up quite considerably over the past 1.5-2 years!

They won't be starting anytime soon. Irish banks won't lend.

murphaph

gaius c wrote: »

It's an obvious bubble. You'd think people would have learned to spot them a bit better after what we've been through.

It's not a bubble. There are feck all properties available to rent. It's supply and demand. Rents have gone up around the same in my part of Berlin (Berlin supply has tightened markedly in the past 5 years). Is that a bubble too or is it only a bubble when it happens in Ireland?

Rents will fall again in Dublin when there's more supply or less demand.

murphaph

who_ru wrote: »

They won't be starting anytime soon. Irish banks won't lend.

For large scale building of apartment complexes there would be less reliance on the Irish banks. Big foreign investors with "cash on the hip" will not ignore strong rental yields in Dublin forever.

The Spider

techdiver wrote: »

This country really depresses me!

Where else would you get a completely dysfunctional economy with massive unemployment/personal debt and emmegration and yet, the property market is still so vastly over priced for the average person with decent earnings.

What's even more depressing is the fact that a few steps can alleviate the issue, such as repossessing defaulting mortgages and zero government interference in the property market.

This country really need to wake up to the fact that high house prices is bad for the economy!

As I've said before on another thread, the banks won't do mass reposessions as it will cost them too much, they will have to hire an army of people to deal with it, at a time where they're cutting staff and encouraging people to bank online, on top of that they'll have to take a massive hit on the mortgage.

Huge repossessions wont happen, it'll cost the banks too much, they'll only happen when prices rise far beyond where they are now, so that it makes financial sense to repossess and sell it on.

gurramok

murphaph wrote: »

For large scale building of apartment complexes there would be less reliance on the Irish banks. Big foreign investors with "cash on the hip" will not ignore strong rental yields in Dublin forever.

They already have bought

The Alliance building in the Gasworks at Ringsend which is conveniently next door to Google has been bought by Kennedy Wilson.
http://www.kennedywilson.com/526-kennedy-wilson-acquires-iconic-alliance-building-in-dublin

techdiver

The Spider wrote: »

As I've said before on another thread, the banks won't do mass reposessions as it will cost them too much, they will have to hire an army of people to deal with it, at a time where they're cutting staff and encouraging people to bank online, on top of that they'll have to take a massive hit on the mortgage.

Huge repossessions wont happen, it'll cost the banks too much, they'll only happen when prices rise far beyond where they are now, so that it makes financial sense to repossess and sell it on.

I'm talking about what is good for the country in the long run. I don't disagree with you that Banks won't do massive re-possessions, but they will have no choice than to repossess more than they are currently.

An economy built on high house prices is a bad economy. More affordable housing means more money is available to the wider economy instead of people using all their money to service large mortgages.

High house prices are good for a small proportion of property owners, landlords etc, but that's it. Unfortunately, the average dumbo on the street seems to think high house prices are good for the country. All this while they are paying €1,000 rent for a 1 bed apartment.

The Spider

techdiver wrote: »

I'm talking about what is good for the country in the long run. I don't disagree with you that Banks won't do massive re-possessions, but they will have no choice than to repossess more than they are currently.

An economy built on high house prices is a bad economy. More affordable housing means more money is available to the wider economy instead of people using all their money to service large mortgages.

High house prices are good for a small proportion of property owners, landlords etc, but that's it. Unfortunately, the average dumbo on the street seems to think high house prices are good for the country. All this while they are paying €1,000 rent for a 1 bed apartment.

€1,000 in Dublin is reasonable, I was paying 1270 for a basement apartment in Rathmines in 2002, it's now eleven years later, inflation alone means that's a fair price.

The banks won't repossess until it makes sense, they'll get repossession orders, but they don't have to act on them for twelve years. There's a huge overhead in terms of employing people to deal with all these alleged repossessions, if the bank hires an extra 100 people to deal with (they'd all have to hire a lot more than that) that's an extra 22000000, over 4 years, as you can't just let people go once their hired, and again the loss on each individual property.

The only way repossession will happen is when the price that can be achieved is close to the loan for the house. So they won't happen until prices rise, people will be left in their properties so as the bank doesn't crytalise it's loss.

House prices are all about supply and demand if there isn't much supply, prices will be higher, same as anything in the economy. Diamonds for instance are kept artificially restricted to ensure there's a high price. Opec does the same with oil.

There's plenty of supply of houses outside Dublin, people can buy and commute, but there's only a certain amount of space within the m50 and that space is at a premium and if you want some of it, then you have to pay for it.

gaius c

OMD wrote: »

After bubbles prices drop below their long term average. They then rise relatively quickly to their long term average and stay at that level. As prices in Ireland already dropped below their long term average it is reasonable that we are now in stage 2 where they revert to their long term average where they will probably stay.

Calling tiny rises in the price of property a bubble is a bit odd

Nothing is selling because the market is broken. You cannot ignore the broken sales market when examining the rental market because the increase in the numbers renting is down to the broken sales market.

turtleback78

murphaph wrote: »

It's not a bubble. There are feck all properties available to rent. It's supply and demand. Rents have gone up around the same in my part of Berlin (Berlin supply has tightened markedly in the past 5 years). Is that a bubble too or is it only a bubble when it happens in Ireland?

Rents will fall again in Dublin when there's more supply or less demand.

Are you insane? head out of the sand please there are empty properties all over the ****ing city and landlords swinging their dicks out the windows hoping to catch some fish.

:o:eek:

Ray Palmer

gaius c wrote: »

Nothing is selling because the market is broken. You cannot ignore the broken sales market when examining the rental market because the increase in the numbers renting is down to the broken sales market.

What "nothing" is selling? There is a shortage of houses suitable for families in Dublin and they are selling quickly and rising in price as a result. The sales market doesn't appear to be broken in Dublin at all.

Every house near me has gone sale agreed in less than a month. That is pretty healthy

Cuddlesworth

Ray Palmer wrote: »

What "nothing" is selling? There is a shortage of houses suitable for families in Dublin and they are selling quickly and rising in price as a result. The sales market doesn't appear to be broken in Dublin at all.

Every house near me has gone sale agreed in less than a month. That is pretty healthy

And about 7 years ago there were 10 times the number of houses going sale agreed. If the market recovers overnight, available property's double or triple from natural movement, who is going to snap up all these lovely deals? I've got a very healthy income at a young age and would struggle to get a mortgage in this environment from our current banks.

I have no idea where the property market is going to go, like the rest of the country. But you can't ignore the tiny sales volume, the huge numbers of arrears and the overwhelming amount of cash buyers. Any sign of trouble again, the case buyers will disappear and the banks will crumble. Its a house of cards beside a open door.

Ray Palmer

Cuddlesworth wrote: »

And about 7 years ago there were 10 times the number of houses going sale agreed. If the market recovers overnight, available property's double or triple from natural movement, who is going to snap up all these lovely deals? I've got a very healthy income at a young age and would struggle to get a mortgage in this environment from our current banks.

I have no idea where the property market is going to go, like the rest of the country. But you can't ignore the tiny sales volume, the huge numbers of arrears and the overwhelming amount of cash buyers. Any sign of trouble again, the case buyers will disappear and the banks will crumble. Its a house of cards beside a open door.

But that has nothing to do with what you said. You said nothing is sell when in fact everything is selling.

It is also a bit of a misnomer that houses kept selling up to the crash. Sales dropped off but prices kept rising. So when people talk of houses loosing value they often ignore that the top prices involved quite few houses.

I couldn't afford to buy my house now with current borrowing rules but can afford the mortgage (tracker)and could afford it if I got a mortgage now too. Sounds like the mortgage market are broken more than the property market. The banks won't crumble from that.

gaius c

Ray Palmer wrote: »

But that has nothing to do with what you said. You said nothing is sell when in fact everything is selling.

It is also a bit of a misnomer that houses kept selling up to the crash. Sales dropped off but prices kept rising. So when people talk of houses loosing value they often ignore that the top prices involved quite few houses.

I couldn't afford to buy my house now with current borrowing rules but can afford the mortgage (tracker)and could afford it if I got a mortgage now too. Sounds like the mortgage market are broken more than the property market. The banks won't crumble from that.

Cuddlesworth is not me!

Nothing is selling because sales volume is tiny despite the "enormous pent up demand" that bulls constantly refer to. Market recovery should be judged by transaction volume, not prices. And to get transaction volume back, prices have to drop...

And you're quite right, sales volume at the top of the bubble started puffing about a year before the price peak as developers started chucking in "free kitchens" to try and keep the prices up.

murphaph

turtleback78 wrote: »

Are you insane? head out of the sand please there are empty properties all over the ****ing city and landlords swinging their dicks out the windows hoping to catch some fish.

:o:eek:

Hmmm, whatever. If you think there are loads of empty properties in Dublin then there's not much I am likely to do to change your mind. Even the majority of tenants on here wouldn't deny that there's upward pressure on vacancies at present.

There are empty properties at any one time by the way, about 2,000 of them right now according to daft (first choice for rentals in Dublin by a mile, even given their rip off prices) but these arefiled and new ones become vacant. So it's not the same 2,000 that are vacant.

2,000 or whatever it is is however less than 1% of total housing stock in Dublin county of course, so quite what you mean with "empty properties all over the city" I have no idea.

Frank Lee Midere

The Spider wrote: »

As I've said before on another thread, the banks won't do mass reposessions as it will cost them too much, they will have to hire an army of people to deal with it, at a time where they're cutting staff and encouraging people to bank online, on top of that they'll have to take a massive hit on the mortgage.

Huge repossessions wont happen, it'll cost the banks too much, they'll only happen when prices rise far beyond where they are now, so that it makes financial sense to repossess and sell it on.

In this country you owe the mortgage after repossession unless you declare bankruptcy.

murphaph

gaius c wrote: »

Nothing is selling because the market is broken. You cannot ignore the broken sales market when examining the rental market because the increase in the numbers renting is down to the broken sales market.

I don't believe tha market is broken. I believe that we should NEVER have had the huge numbers of transactions taking place each year leading up to the boom. In Germany the housing market is not broken yet has very few transactions per capita compared to Ireland of the boom. Loads of people buying and selling homes (only making solicitors and estate agents richer) does not make for a healthy housing market. In Germany you save up a huge deposit and then buy the house you'll probably die in, if you can afford it, otherwise you'll rent till you die (what about half the people do).

The reality now is that many people could never afford the house they bought and many still can't afford to buy a house and renting is going to be a way of life for them now, not just a stopgap solution. People will start to realise that the level of transactions we saw during the boom will not (hopefully) happen again.

Frank Lee Midere

Ray Palmer wrote: »

What "nothing" is selling? There is a shortage of houses suitable for families in Dublin and they are selling quickly and rising in price as a result. The sales market doesn't appear to be broken in Dublin at all.

Every house near me has gone sale agreed in less than a month. That is pretty healthy

But that's because of an artificially limited supply.

Frank Lee Midere

murphaph wrote: »

I don't believe tha market is broken. I believe that we should NEVER have had the huge numbers of transactions taking place each year leading up to the boom. In Germany the housing market is not broken yet has very few transactions per capita compared to Ireland of the boom. Loads of people buying and selling homes (only making solicitors and estate agents richer) does not make for a healthy housing market. In Germany you save up a huge deposit and then buy the house you'll probably die in, if you can afford it, otherwise you'll rent till you die (what about half the people do).

The reality now is that many people could never afford the house they bought and many still can't afford to buy a house and renting is going to be a way of life for them now, not just a stopgap solution. People will start to realise that the level of transactions we saw during the boom will not (hopefully) happen again.

It doesn't have to. It's running at 5% now. That's what distorts the markets.

I don't get either the idea that the banks won't go after non payers until prices recover, to boom level, as that's not going to happen. The banks need capital now and people will still repay the remainder of the mortgage unless they declare bankruptcy. What's stopping repossessions is politics.

Frank Lee Midere

murphaph wrote: »

Hmmm, whatever. If you think there are loads of empty properties in Dublin then there's not much I am likely to do to change your mind. Even the majority of tenants on here wouldn't deny that there's upward pressure on vacancies at present.

There are empty properties at any one time by the way, about 2,000 of them right now according to daft (first choice for rentals in Dublin by a mile, even given their rip off prices) but these arefiled and new ones become vacant. So it's not the same 2,000 that are vacant.

2,000 or whatever it is is however less than 1% of total housing stock in Dublin county of course, so quite what you mean with "empty properties all over the city" I have no idea.

You would need to look at average time on the market to work out the number of properties rented per year.

Edit : but there has been a clear drop - by 50% - in the number of properties available since August. That's interesting. Does it make sense considering continuos emigration? Reductions in income etc. ?

My two cents - BTLers who are not paying mortgages are not necessarily renting out, just waiting for repossession and bankruptcy.