Dublin - Significant reduction in rents coming?

Smouse156

Dav010 wrote: »

So are you saying an Assistant Professor of Economics, and the foremost authority on the housing market, is wrong and/or is massaging the data for his own benefit? That would be quite an accusation.

Do you not think other economists or even his own students would tear his analysis apart if it was as inaccurate as you claim it is?

Sorry Brisan, I’ll stick with the experts and ignore the amateurs. Daft have access to a lot more information and economic/statistical expertise than those who keep putting up the same diagram and refer to “dozens of examples on property pin” or “I know one apartment”.

You sound like one of the “I can’t believe I can’t rent it” brigade of delusional landlords if you seriously believe that the Daft ASKING price report is a proper reflection of the current market

Marius34

Smouse156 wrote: »

You sound like one of the “I can’t believe I can’t rent it” brigade of delusional landlords if you seriously believe that the Daft ASKING price report is a proper reflection of the current market

I'm not a fan of Daft reports, but honest questions, what is the proper reflection of current rental market? Is there any better reports for rental market?
I see sometimes people here relies on some reports, and when it doesn't show what they want to see, they start to rubbish the same reports.

The Student

Smouse156 wrote: »

You sound like one of the “I can’t believe I can’t rent it” brigade of delusional landlords if you seriously believe that the Daft ASKING price report is a proper reflection of the current market

Genuine question.

What benefit is it to Daft to give a false report. Daft make their revenue from the ads placed and the landlord pays a fixed price for each ad. How does inflating the rental figure benefit Daft?

km991148

brisan wrote: »

https://www.daft.ie/dublin/apartments-for-rent/drumcondra/grace-park-gardens-drumcondra-dublin-2095945/
Not sure if the area interests you but brand new apts in a period house

I lived in one from what looks like the same crowd.

If it is, let's just say they have very good photography skills.. give it a couple of months with the cheapest laminate, bad insulation,bad ventilation and mould and see how it goes.. but rental standards are a whole other topic..

km991148

The Student wrote: »

Genuine question.

What benefit is it to Daft to give a false report. Daft make their revenue from the ads placed and the landlord pays a fixed price for each ad. How does inflating the rental figure benefit Daft?

How does Daft benefit from giving a good or better impression of the rental market?

They are hardly likely to discourage potential landlords now, are they??

Smouse156

The Student wrote: »

Genuine question.

What benefit is it to Daft to give a false report. Daft make their revenue from the ads placed and the landlord pays a fixed price for each ad. How does inflating the rental figure benefit Daft?

I never said the report was false! I’m just saying it doesn’t reflect real rents due to RPZ.

Example, landlord with empty property asking €2000 (2019 price) has empty unit last 4 months. He clearly can’t achieve the €2000/month. In a normal market he would drop the rent to €1800 and test the waters and then raise it back to €2000 if and when the market recovers. However, given the RPZ rules he can’t reduce the headline rent if he would like to get €2000 in the near future so he decides to offer incentives.

Potential tenants ring up and he offers a month free. 13 for the price of 12. He’s effectively lowered the rent to €1846 for the next 13 months but he hasn’t changed the headline rate.

The daft report won’t pick this up! Last year I’m sure some rents were even higher than were reported by Daft due to RPZ (especially those locked into lower than market rates) with some cash in hand deals for a proportion of the rent.

Given all the stories we hear here about empty units, landlords offering deals etc it’s clear what the real picture is! Stubbornly believing misleading data isn’t going to help anyone.

So to sum up, the daft data is not wrong: asking prices are similar to last year, however, realised rents are lower.

There is no report to reflect incentives, however, a report from RTB would be closer as they have agreed rents (landlord asks €2000, tenant offers €1900 and landlord accepts). Daft asking price shows €2000, RTB report shows €1900 (better picture).

The Student

km991148 wrote: »

How does Daft benefit from giving a good or better impression of the rental market?

They are hardly likely to discourage potential landlords now, are they??

How are they discouraging potential landlords? There are no returns on deposits in banks even with the possibility of negative interest rates you would expect people to invest in property even if they only make a small return its still a return.

Surely its in Dafts interest to get volume of ads rather than having the same ad on their sight almost indefinitely?

km991148

The Student wrote: »

How are they discouraging potential landlords? There are no returns on deposits in banks even with the possibility of negative interest rates you would expect people to invest in property even if they only make a small return its still a return.

Surely its in Dafts interest to get volume of ads rather than having the same ad on their sight almost indefinitely?

All I'm saying is, they are likely (in their reports) to want to show the higher prices as advertised. It gives an overall better impression of the rental market. This isn't the only issue at play, as outlined above there are other reports that potentially reflect the market better.

Dav010

Smouse156 wrote: »

You sound like one of the “I can’t believe I can’t rent it” brigade of delusional landlords if you seriously believe that the Daft ASKING price report is a proper reflection of the current market

Because I have more faith in a report prepared by experts?

The Student

km991148 wrote: »

All I'm saying is, they are likely (in their reports) to want to show the higher prices as advertised. It gives an overall better impression of the rental market. This isn't the only issue at play, as outlined above there are other reports that potentially reflect the market better.

But how does it benefit them? Surely people would see through this if the information was incorrect? And as such people would not use their service?

I am at a loss as to why they would do it. Nobody has been able to give a legitimate reason to do it. It does not make business sense from Daft's perspective to do this.

There is a benefit for landlords to do it but 70% of the rental market is made up of landlords with 3 or less properties each.

km991148

The Student wrote: »

But how does it benefit them? Surely people would see through this if the information was incorrect? And as such people would not use their service?

I am at a loss as to why they would do it. Nobody has been able to give a legitimate reason to do it. It does not make business sense from Daft's perspective to do this.

There is a benefit for landlords to do it but 70% of the rental market is made up of landlords with 3 or less properties each.

Its just basic marketing? If a report is consistently telling you headline rental prices are X then its going to sound positive. This keeps potential landlords interested and drives sales leads.

If the reports are suddenly telling investors that the real market price is actually x-20% then it doesn't look as good.

I am not saying its a deliberate attempt to inflate figures (or some mass scale conspiracy), more a lack of motivation to give the true (bleaker) picture.

Similarly when prices are on the up - I am sure those reports find their way into the the newspapers etc a lot quicker because they want to promote a positive rental market.

cgcsb

Dav010 wrote: »

So are you saying an Assistant Professor of Economics, and the foremost authority on the housing market, is wrong and/or is massaging the data for his own benefit? That would be quite an accusation.

Not really. All are fallible. Are you saying that supposed experts are always right? It was experts in their respective fields that gave us the global financial crisis, the current housing crisis, the pension crisis, the health crisis, the migration crisis, the big switch to diesel and varies other societal follies.If regular folk don't question them, then the follies tend to increase in magnitude.

The Student

km991148 wrote: »

Its just basic marketing? If a report is consistently telling you headline rental prices are X then its going to sound positive. This keeps potential landlords interested and drives sales leads.

If the reports are suddenly telling investors that the real market price is actually x-20% then it doesn't look as good.

I am not saying its a deliberate attempt to inflate figures (or some mass scale conspiracy), more a lack of motivation to give the true (bleaker) picture.

Similarly when prices are on the up - I am sure those reports find their way into the the newspapers etc a lot quicker because they want to promote a positive rental market.

it still does not make sense. Putting up figs that are not being achieved would become common knowledge (due to the interest in the rental market as I am sure renters talk to each others about what they are paying in rent).

Daft like other businesses trade on their reputation so if the details were incorrect then this would damage their business.

They still get the fee per ad irrespective of the accuracy of the rental asking price. Logic would suggest a realistic price would encourage more business as it would result in more ads placed on Daft.

Daft don't want ads to be there long term otherwise landlords would not use them if they thought there was an alternative site to advertise their rental property that would get their property rented quicker.

Manion

Smouse156 wrote: »

So to sum up, the daft data is not wrong: asking prices are similar to last year, however, realised rents are lower.

This is the crux of the disagreement on this thread. Your assertion that realised rents are lower cannot be proven or disproven at this point in time with the data available. The webscrapping analytics graph that keeps getting linked to cannot make any better claim to visibility of the actual realized rents than the daft.ie report and referencing a handful of cases on a website showing property price decreases is not really a valid way of demonstrating ad hypothesis is likely. The report openly acknowledges this limitation. The concept they are modeling is asking price, not rent received.

You may very well be bang on the money, absolutely right, but you may also be completely wide of the mark.

A posthoc analysis could be done down the road to determine how divergent asking prices for first time tenants was versus actual rent achieved by comparison to RTB database. But even that wouldn't account for special intro rates you mentioned.

So is the daft report useful? Yes it is. While you may not be able to draw a straight line from asking price to rent achieved it is reasonable to accept these are correlated since they are dependent variables (at least on the way up they are). As such we can infer with confidence that A) that rents are not rising and that there is higher availability of properties. The hypothesis that rents have fallen by 25% (as posed by one poster) seems improbably because that would mean asking price and rent obtained are no longer strongly correlated. Since this theory comes from simply looking at a different way of counting the asking prices, I'm inclined to discount it. In this way we build up theory, hypothesis and data in a loop.

Dav010

cgcsb wrote: »

Not really. All are fallible. Are you saying that supposed experts are always right? It was experts in their respective fields that gave us the global financial crisis, the current housing crisis, the pension crisis, the health crisis, the migration crisis, the big switch to diesel and varies other societal follies.If regular folk don't question them, then the follies tend to increase in magnitude.

You are equating statistical analysis of the rental sector with the behaviour of banks and speculators, car manufacturers etc?

cgcsb, the Daft report relates to data which is current and historical, it is statistical analysis rather than a report on probable future trends.

Given the same data, unless you are calling into question the competence and honesty of one of Ireland’s leading economists and businesses to tabulate existing data, this is like talking to an antivaxer who believes there is a sinister reason for publishing research results.

Manion

Dav010 wrote: »

You are equating statistical analysis of the rental sector with the behaviour of banks and speculators, car manufacturers etc?

cgcsb, the Daft report relates to data which is current and historical, it is statistical analysis rather than a report on probable future trends.

Given the same data, unless you are calling into question the competence and honesty of one of Ireland’s leading economists and businesses to tabulate existing data, this is like talking to an antivaxer who believes there is a sinister reason for publishing research results.

I'd say its closer to what was and still is going on with the American elections. Accusations of malpractice and corruption without substance and the false equivalence of opinions.

Personally I'm fine with believing the daft report isn't presenting the full picture, it doesn't pretend to. Also it should be noted the time period doesn't cover the most recent lock down level 3/5 period. The idea that the report could be published recently but reflect a reporting delay is something people are struggling with.

brisan

Manion wrote: »

I'd say its closer to what was and still is going on with the American elections. Accusations of malpractice and corruption without substance and the false equivalence of opinions.

Personally I'm fine with believing the daft report isn't presenting the full picture, it doesn't pretend to. Also it should be noted the time period doesn't cover the most recent lock down level 3/5 period. The idea that the report could be published recently but reflect a reporting delay is something people are struggling with.

Its a pity we are all not as intelligent or as perceptive as you think you are

Manion

brisan wrote: »

Its a pity we are all not as intelligent or as perceptive as you

True

Smouse156

Dav010 wrote: »

Because I have more faith in a report prepared by experts?

No because you can’t open your eyes

cgcsb

Dav010 wrote: »

You are equating statistical analysis of the rental sector with the behaviour of banks and speculators, car manufacturers etc?

cgcsb, the Daft report relates to data which is current and historical, it is statistical analysis rather than a report on probable future trends.

Given the same data, unless you are calling into question the competence and honesty of one of Ireland’s leading economists and businesses to tabulate existing data, this is like talking to an antivaxer who believes there is a sinister reason for publishing research results.

Don't see a point in continuing the conversation if you can only perceive things in very strict black and white, right and wrong terms. Most reasonable people can criticise publications without that criticism being an accusation of wrong doing or a repudiation of the author's experience or status.

Manion

@Smouse156 if I recall you're the user who has a new job in Dublin but is living in Cork. I assume with family members? Would you consider renting a place in Cork and workin In Dublin, if not why not?

Anecdotally, everyone I know from work who has relocated to the country have moved in with family with the idea of saving money for a deposit on a house. All are planning to return to Dublin in 2021.

Smouse156

Manion wrote: »

This is the crux of the disagreement on this thread. Your assertion that realised rents are lower cannot be proven or disproven at this point in time with the data available. The webscrapping analytics graph that keeps getting linked to cannot make any better claim to visibility of the actual realized rents than the daft.ie report and referencing a handful of cases on a website showing property price decreases is not really a valid way of demonstrating ad hypothesis is likely. The report openly acknowledges this limitation. The concept they are modeling is asking price, not rent received.

You may very well be bang on the money, absolutely right, but you may also be completely wide of the mark.

A posthoc analysis could be done down the road to determine how divergent asking prices for first time tenants was versus actual rent achieved by comparison to RTB database. But even that wouldn't account for special intro rates you mentioned.

So is the daft report useful? Yes it is. While you may not be able to draw a straight line from asking price to rent achieved it is reasonable to accept these are correlated since they are dependent variables (at least on the way up they are). As such we can infer with confidence that A) that rents are not rising and that there is higher availability of properties. The hypothesis that rents have fallen by 25% (as posed by one poster) seems improbably because that would mean asking price and rent obtained are no longer strongly correlated. Since this theory comes from simply looking at a different way of counting the asking prices, I'm inclined to discount it. In this way we build up theory, hypothesis and data in a loop.

I agree with your points and I definitely agree we don’t have any single data report that tells us the true picture. We can only infer on what we’ve learned from increased availability, no tourism, much lower demand, tenant stories of negotiating and stories of landlords struggling to rent at last years rate.

While nobody has a perfect picture my personal approximation from all I’ve read is that that rents have fallen 5-10% for those that negotiated. Either through offering less than asking or negotiating an incentive. 25% as you mentioned looks like wishful thinking. As you stated I could be right or I could be wrong!

My main point in all this is rigidly believing one report (daft especially) which can’t give an accurate picture is misleading and giving false expectations.

Edgware

Manion wrote: »

@Smouse156 if I recall you're the user who has a new job in Dublin but is living in Cork. I assume with family members? Would you consider renting a place in Cork and workin In Dublin, if not why not?

Anecdotally, everyone I know from work who has relocated to the country have moved in with family with the idea of saving money for a deposit on a house. All are planning to return to Dublin in 2021.

There are a lot of anecdotes which are obviously not scientific but they give an idea of behaviour.
There are loads of people who have left Dublin to work from home in the provinces. One of the main reasons is that there is nothing for them in Dublin
at the moment, no pubs, no restaurants, no sports, no concerts and their workplace is closed. Who wants to work from an apartment under these circumstances? While they may be back with Mammy and in a position to save some money allegedly for a"deposit" as soon as posibble they will be back where they can lead a life without Mammy asking where were they last night.
Then supply will start drying up although there are a lot of developments in the process of construction

Dav010

Smouse156 wrote: »

No because you can’t open your eyes

So believing a report prepared based on research done by the countries leading expert on rental data means I “can’t open my eyes”?, is that you Gemma?

Smouse156

Manion wrote: »

@Smouse156 if I recall you're the user who has a new job in Dublin but is living in Cork. I assume with family members? Would you consider renting a place in Cork and workin In Dublin, if not why not?

Anecdotally, everyone I know from work who has relocated to the country have moved in with family with the idea of saving money for a deposit on a house. All are planning to return to Dublin in 2021.

Yes I live at home rent free with family. Looking to buy next year and would much prefer to WFH in Cork and go to Dublin the odd time. This may or may not be possible. I’m certainly happy not to be paying any insane Dublin rent!

PommieBast

Marius34 wrote: »

I'm not a fan of Daft reports, but honest questions, what is the proper reflection of current rental market? Is there any better reports for rental market?
I see sometimes people here relies on some reports, and when it doesn't show what they want to see, they start to rubbish the same reports.

All I can say is that there are at least four empty flats in the same apartment block as my own flat in Dublin, with asking prices of varying discounts from what I am currently paying, and none have shifted since March.

Smouse156

Dav010 wrote: »

So believing a report prepared based on research done by the countries leading expert on rental data means I “can’t open my eyes”?, is that you Gemma?

You really don’t understand! I’m sorry you don’t get it! I think the majority do, but keep on believing you can get last years rent and see how it works out for you!

AssetBacked2

https://www.theverge.com/2020/11/16/21570416/airbnb-coronavirus-pandemic-travel-hospitality

One story on the Airbnb prospectus as part of its going public.

While the headline is a bit clickbaity, it only had a 19% drop in revenue in the last quarter and in 2020 bookings are down 39%. I would've thought that was pretty good going for them. But I suppose, even if revenue was what it was last year, they still lost hundreds of millions so a 19% drop in revenue would compound its inability to make a profit. It also let 25% of its staff go earlier this year.

Its valuation was indicated to be around 17 billion in August 2020, down from 31 billion in 2017, but it is guarded and uncertain with its outlook;

“If we fail to retain existing hosts or add new hosts, or if hosts fail to provide high-quality stays and experiences, our business, results of operations, and financial condition would be materially adversely affected,” Airbnb said, adding that further decline or disruption in travel and hospitality or other economic downturn would “materially adversely affect our business, results of operations, and financial condition.”

km991148

The Student wrote: »

it still does not make sense. Putting up figs that are not being achieved would become common knowledge (due to the interest in the rental market as I am sure renters talk to each others about what they are paying in rent).

Daft like other businesses trade on their reputation so if the details were incorrect then this would damage their business.

They still get the fee per ad irrespective of the accuracy of the rental asking price. Logic would suggest a realistic price would encourage more business as it would result in more ads placed on Daft.

Daft don't want ads to be there long term otherwise landlords would not use them if they thought there was an alternative site to advertise their rental property that would get their property rented quicker.

It might not make sense to you, but that's how I see it.

I would also challenge some of the assumptions you made there as well (either on the basis that they might not hold true or that people might not care as much as you think).

Claw Hammer

The Student wrote: »

it still does not make sense. Putting up figs that are not being achieved would become common knowledge (due to the interest in the rental market as I am sure renters talk to each others about what they are paying in rent).

Daft like other businesses trade on their reputation so if the details were incorrect then this would damage their business.

They still get the fee per ad irrespective of the accuracy of the rental asking price. Logic would suggest a realistic price would encourage more business as it would result in more ads placed on Daft.

Daft don't want ads to be there long term otherwise landlords would not use them if they thought there was an alternative site to advertise their rental property that would get their property rented quicker.

DAFT cannot value properties as it is only an advertising medium. I notice that some ads for rentals are lingering for months which would indicate that the rentals are overvalued and reports based on asking prices are thus compromised. If there were reports based on ads which were let within 10 days i would think that it would give a more accurate view of the state of the market currently.
I notice looking at 2 bedroomed apartments in Dublin 7 that some have been advertised for weeks.
I would think that asking prices may have remained high until September because there was hope of the usual September boost due to students returning. That hasn't happened and I wonder how many will wait for next September.