Dublin - Significant reduction in rents coming?

beauf

Dav010 wrote: »

That only applies to those who can/want to commute. The surge which will occur if lectures do resume will be unlike anything seen before, those new purpose built accommodations amongst the most expensive for students.

A lot of the top end accommodation is for wealthy foreign students studying here. They will be slower to come back as it takes a lot more planning and commitment.

Dav010

beauf wrote: »

Yes. But the current situation is "temporary" we won't know the permanent effect of WFH until everything starts back up again. I agree it will be less than people hoped. But I'm curious what will happen.

Do you not think that the numbers wfh are probably at their highest now, and if anything, that those numbers will fall as offices reopen, and people start having to look for accommodation again?

Personally I think there has been a fundamental change in how employers view the necessity of big offices, Covid achieved what the Government tried to 15 yrs ago with decentralisation, albeit in a different way. Offices were not moved out of Dublin, but employees are thanks to broadband. But the reality is that some offices will reopen, and some employees will have to go back to rented accommodation, which will increase demand.

There are currently 120k students in the five third level colleges in Dublin, a significant proportion of those are from Dublin and surrounds from where it is possible to commute, those that can’t, the scramble will be on.

Dav010

Augeo wrote: »

I reckon some will be sorting the accommodation out in advance tbh.
Don't really see how it'll be carnage. Especially with the AirB&B/tourist situation.

As I said earlier, the surprising thing about that Prime Time report was that there are a lot fewer SL properties coming to the market than was thought. I have an Airbnb house not far from Dublin, it was booked solid last year once restrictions were lifted, it is already booked June/July/August/September as very few people are currently planning to holiday abroad.

I know people were hoping for the demise of short let’s, it just isn’t happening.

agoodpunt

As soon as level 5 is lifted with lots of tenants on notice for various reasons most for sales, major refurbs and owners moving in the college going family members with a lag in extra supply it will be a warzone.
Govt should be sourcing/encentivising extra supply to the market now closing down construction will come back to bite them, but there is not 1 elected TD capable of any imagination or foresight.
RTB will be happy to blame extra workload on long delayed response keeping some in accomodation indefinitly
Dont agree with the gouging for lack of supply but some will as always

Pussyhands

So from people looking to rent, do you see a reduction in rents? Or what's the lay of the land?

Woah

Pussyhands wrote: »

So from people looking to rent, do you see a reduction in rents? Or what's the lay of the land?

Haven't seen any reduction in rents personally and as others have said now is probably the peak of the wfh effect so it's just depressing it hasn't reduced rents.


There may be a reduction if you are looking to rent a full house/apartment but in terms of houseshares there are more rooms available but the price hasn't reduced at all. In those cases I assume landlords are making the other tenants pay for the empty room rather than reduce the rent to try and fill the room.



Anecdotal but I have a few friends who are wfh and left dublin but will all be back when offices reopen so God knows what it will be like in September

tommyombomb

This worries me of the mad push. Going to be going back myself in sept or oct when it eases. Ideally want to buy but will be another 20k off that still then. Smart play is stay at home but need some city living and my independence back

agoodpunt

When ever L5 lifts and govt know many LLs will be selling or refurbing supply going to be further reduced.
Demand for builders after closing construction for so long will fuel inflation in house prices and rents.
Reits have maintained a lot of empty units so will lightly cash in on the shortage

JimmyVik

Dav010 wrote: »

Depends on whether LLs took the opportunity to sell. What makes this situation different is that the stock of rentals will not have changed significantly, even the number of students will be a relative constant, it’s that normally a proportion of students renting would be looking to rent for the first time, or change rentals, but in Sept/Oct virtually all students will be looking for new accommodation because few will have kept their rentals during this academic year.

Councils have been going around buying property all during the pandemic.
A lot of that empty supply is now waiting for social welfare and as the replacement for direct provision.
Any excess supply at the moment is being mopped up on the qt.

Claw Hammer

Pussyhands wrote: »

So from people looking to rent, do you see a reduction in rents? Or what's the lay of the land?

Renst are down. Plenty of choice around Dublin.

Galwayhurl

Claw Hammer wrote: »

Renst are down. Plenty of choice around Dublin.

Agreed.

My partner and I returned to Ireland in August 2019. At that time our search for an apartment was under the following criteria:

Anywhere in County Dublin
Min 1 bed or bigger (i.e. not including studios)
Max price we were willing to pay, 1500.

At that time the number of said properties available at any one time was around 130 to 140.

Today there are 482.

Definite increase in supply since that time.

Subutai

I'm not looking, but rents are significantly down in our building. One beds down from 1.7k to 1.5k or even 1.4k. Two beds down from 2.1-1.8k to as low as 1.6k.

Small enough volume though.

Ozark707

Subutai wrote: »

I'm not looking, but rents are significantly down in our building. One beds down from 1.7k to 1.5k or even 1.4k. Two beds down from 2.1-1.8k to as low as 1.6k.

Small enough volume though.

Know someone who got ~25% off the previous let price. This would be considered high end. Previous tenants went home during covid and it was vacant for 4 months and the mtge needed to be paid. That said there was a few interested parties at the viewing. Demand is there, just not at the previous levels.

PommieBast

Prices are certainly down, but a surprising number of landlords are unresponsive and pretty much all want a minimum of 12 months. Factor in the need to have overlapping lets and my current place being all-bills-paid I doubt my bottom-line saving would be worth the hassle.

Ozark707

PommieBast wrote: »

Prices are certainly down, but a surprising number of landlords are unresponsive and pretty much all want a minimum of 12 months. Factor in the need to have overlapping lets and my current place being all-bills-paid I doubt my bottom-line saving would be worth the hassle.

Yes if you have a reasonable deal already then there is probably not much point in moving. The question is whether there are others who can now spot a far better deal (it might not be just cost but also closer to work/amenities...) will decide to make the move.

Phat Cat

A colleague of mine told me that he got a letter from his landlord the other week letting him know of a €100 increase on his one bed apartment, pushing it up to over €1800pm. He's there nearly 6 years and it was €1500 when he moved in so he's looking to get somewhere cheaper.

From what I've seen, rents are only down on higher end apartments that cost €2000 for one bedroom and €2500+ for two bed pre Covid, but everything else has held firm and of course the 4% per annum RPZ places are still going up. That 4% yearly increase on RPZ will remain in place until 31 December 2021, so what happens then? Will the ever increasing rent still continue to spiral out of control?

Jmc25

I've been looking to rent recently and it seems to me that rents are dropping, albeit very slightly and dependent on the area/property type. My budget was around 1500 to 1800 and I was looking for a 1/2 bed apartment close to the city centre or a two bed house further out.

Apartments in areas close to the city centre certainly don't seem to have the interest they had when I was previously looking to rent in 2017. I asked for a reduction in the asking rent on one and two bed apartments in these areas and while the idea was entertained I didn't follow up. One letting agent suggested a drop of 75 euro on an 1800 apartment, and I saw a few weeks later the asking price had been dropped by 50 euro and was marked as let agreed on daft. So things are hardly in free fall.

I viewed a couple of apartments which were owned and managed by funds/developers and was told were to go by the agents when I asked about a reduction in the rents - and these were already priced higher than the average for the areas. Obviously they can afford to wait it out for a few weeks or months and expect things will pick up if things reopen during the summer, although I've since noticed one fund advertising the same apartments for 25 less per month.

I was also looking at houses in areas a bit further out in a similar price range and they seemed to have plenty of interest. I never heard back after my initial enquiry about quite a few places and anywhere I viewed the agent made it clear that there were quite a few people interested so I didn't even bother trying to negotiate the rent.

I do wonder whether there are enough high earners in Dublin looking for somewhere to rent for the amount of "high end" apartments they've built in recent years. If the funds who own these apartments reduce their rents by a couple of hundred per month then they would be within my own budget and suddenly the ones I was looking at this year become a lot less attractive and presumably their rents will fall as well. I suppose whether the funds drop their prices all depends on the demand out there post covid restrictions.

One further thought I had after the whole experience was, how many people not in receipt of state supports can afford to rent a three bed house for 2000 to 2500? Is this market completely propped up by the state?

beauf

Jmc25 wrote: »

....I suppose whether the funds drop their prices all depends on the demand out there post covid restrictions....

Depends if they actually want to rent them or are happy to leave them empty.

https://www.designingbuildings.co.uk/wiki/Buy_to_leave

Amadan Dubh

We moved out of a two bed place in South Dublin 2 months ago that was 2k, which has now been on Daft for the 2 months since we moved and the rent has been dropped 150 in this time period. When we moved in I felt for 2k it was definitely up there in value for how nice the place was compared to what is on the market for 1800-2300 (our budget) so I'm surprised they dropped the price.

spaceHopper

Amadan Dubh wrote: »

We moved out of a two bed place in South Dublin 2 months ago that was 2k, which has now been on Daft for the 2 months since we moved and the rent has been dropped 150 in this time period. When we moved in I felt for 2k it was definitely up there in value for how nice the place was compared to what is on the market for 1800-2300 (our budget) so I'm surprised they dropped the price.

At this stage that is equivalent to a €333 a month reduction in rent (4000/12). A few years ago you would have moved on and they would have had a new tenant in the next week with little to no loss in rent.

Phat Cat

Does anyone know if a landlord can raise the rent by100e in a RPZ then raise it by another 100e 18 months later?

JimmyVik

Phat Cat wrote: »

Does anyone know if a landlord can raise the rent by100e in a RPZ then raise it by another 100e 18 months later?

Whats 6% of your annual rent?

Phat Cat

JimmyVik wrote: »

Whats 6% of your annual rent?

It's not my apartment, my colleague said that his rent is going up, from 1700 to 1800 ,18 months after his last increase. Seems pretty unfair during a global pandemic buy there you go.

Jmc25

Phat Cat wrote: »

It's not my apartment, my colleague said that his rent is going up, from 1700 to 1800 ,18 months after his last increase. Seems pretty unfair during a global pandemic buy there you go.

It's within the rules alright. Depending on how that €1800 compares to similar properties in the area your friend could try negotiating with the LL by telling them they will consider leaving if the increase takes effect. While things aren't in freefall out there, they're not exactly hopping either so unless the property is underpriced due to rent controls then potentially it may sit vacant for a few weeks while the LL finds new tenants. At that rent, if it stays vacant for even three weeks then that's the entire annual increase wiped out for the LL.

Whether that will work or not totally depends if the LL is aware of what the market is currently like, whether they actually want to keep your friend on as a tenant, whether they're a reasonable person in general etc etc.

Ozark707

Amadan Dubh wrote: »

We moved out of a two bed place in South Dublin 2 months ago that was 2k, which has now been on Daft for the 2 months since we moved and the rent has been dropped 150 in this time period. When we moved in I felt for 2k it was definitely up there in value for how nice the place was compared to what is on the market for 1800-2300 (our budget) so I'm surprised they dropped the price.

Thanks for the update. It seems at least that this LL is actively trying to let the place (unlike the REIT's) with his pricing strategy.

Claw Hammer

Phat Cat wrote: »

It's not my apartment, my colleague said that his rent is going up, from 1700 to 1800 ,18 months after his last increase. Seems pretty unfair during a global pandemic buy there you go.

The fact of a global pandemic is irrelevant. many people are better off because of the pandemic. If he is in Dublin he should be able to negotiate a better deal and have his part 4 time done before the Autumn surge in rents.

Phat Cat

Claw Hammer wrote: »

The fact of a global pandemic is irrelevant. many people are better off because of the pandemic. If he is in Dublin he should be able to negotiate a better deal and have his part 4 time done before the Autumn surge in rents.

Haha spoken like a true landlord To be honest I think he's resigned to moving on as his landlord seems to be fairly unreasonable and won't budge on price. Also do you really think that the rents will surge in price in the Autumn? From the outside looking in that seems fairly unattainable as the market seems to have hit it's ceiling now, higher end places might go back up in price, but I can't see the average apartment in Dublin going any higher then they are now.

Jmc25

Phat Cat wrote: »

Haha spoken like a true landlord To be honest I think he's resigned to moving on as his landlord seems to be fairly unreasonable and won't budge on price. Also do you really think that the rents will surge in price in the Autumn? From the outside looking in that seems fairly unattainable as the market seems to have hit it's ceiling now, higher end places might go back up in price, but I can't see the average apartment in Dublin going any higher then they are now.

With the thousands of apartments built to rent in recent years one would imagine rents have peaked and if the higher end of the market reduce rents (as oppose to leaving hundreds of apartments vacant, which is by no means a certainty) then the rest of the market will follow. That said I'd be surprised if there wasn't one last surge in the form of a mini bubble whenever things get back to some form of normality, probably some time in the autumn.

Claw Hammer

Phat Cat wrote: »

Haha spoken like a true landlord To be honest I think he's resigned to moving on as his landlord seems to be fairly unreasonable and won't budge on price. Also do you really think that the rents will surge in price in the Autumn? From the outside looking in that seems fairly unattainable as the market seems to have hit it's ceiling now, higher end places might go back up in price, but I can't see the average apartment in Dublin going any higher then they are now.

When the students come back and businesses re-open and working from home reduces and tourism resumes, the loss of units from the rental market and the halt in construction activity will cause a serious supply problem in Dublin.

Varik

Jmc25 wrote: »

It's within the rules alright. Depending on how that €1800 compares to similar properties in the area your friend could try negotiating with the LL by telling them they will consider leaving if the increase takes effect. While things aren't in freefall out there, they're not exactly hopping either so unless the property is underpriced due to rent controls then potentially it may sit vacant for a few weeks while the LL finds new tenants. At that rent, if it stays vacant for even three weeks then that's the entire annual increase wiped out for the LL.

Whether that will work or not totally depends if the LL is aware of what the market is currently like, whether they actually want to keep your friend on as a tenant, whether they're a reasonable person in general etc etc.

Problem is that the rent increases are compounding, so post post pandemic it matters.

The increase requires 90 days notice after the review, and no one really holds a tenant to any notice when they leave. So taking it as up to 3 months at the 1700 before any increase to either another nominal amount or the full whack plus a bit with a new tenant.

So with a few variables of when he handed in his notice or if at all and how long that was since the review, and with a month empty in any case it's be between 1y6m and 1y3m (vs 1700 with no lost month) before the LL would start to benefit from the Tenant leaving (assuming the new tenant isn't bad).

If Tenant offered 1725 as an alternative then those change to 1y11m to 1y7m, and at 1750 it's 2y10m to 2y3m.

The LL could look at the numbers or he might not and be happy to see the tenant leave or cower in the face of a month empty.

The fact that it's compounding and that there's a 90 day notice that you can ignore with a new tenant means it's not that straightforward.