Boom With A View

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From the latest Daft.ie report

Daft.ie released a new report this morning – The Daft.ie Rental Report, an analysis of recent trends in the Irish rental market 2016 Q2.

It says:

There were just 3,600 homes to rent nationwide on August 1st — 1,000 fewer than on the same date a year previously.

The numbers for Dublin are lower still, with just 1,100 properties available to rent at the start of May.

Meanwhile, the average rent nationwide has risen by over one third since bottoming out in 2011 and has surpassed its 2008 peak.

Monthly rents are now almost 10% higher than they were a year ago. This isn’t a happy picture for anyone renting in Ireland.

Read the report in full here

71 thoughts on “Boom With A View

        1. Nigel

          More business for them is surely more rental properties to showcase? Not saying they mightn’t be doing something short-sighted and damaging to themselves and the market, but jacking up rents via scarcity is a bit counter-intuitive for something that needs an abundance of rental properties to really thrive.

          1. fluffybiscuits

            The more shortage of properties there is the more people that go to their website every day the more ad revenue they get

            In saying that the opposite could true as well

          2. Nigel

            I suppose. Still seems incredibly short-sighted, if that’s what they’re doing, though I get that the possibility of such shenanigans might create a conflict of interest. On the other hand that might be negated by the fact that they can capitalise on a scarcity OR on a surplus, so it’s all the one to them.

          3. _d_a_n_

            Whateverthe business motice of Daft, the numbers speak for themseleves, and anyone with any experience of the situation would concur; the rental market in Dublin is completely out of control. It is making it extremely difficult for people to build any sort of life themselves and something needs to be done.

    1. louislefronde

      Meanwhile, the commercial department at The Irish Times are rubbing their hands with glee at the thought of all that advertising revenue which comes from hyping the property market…..whilst conveniently avoiding all comment about obvious anti-competitive practices (which is a crime) skewing the market.

      The census doesn’t lie….there are thousands of vacant properties in Dublin, which is a small city with a small population…. Demand is not outstripping normal supply….!

      1. _d_a_n_

        If demand is high, and there are thousands of vacant properties, why are landlords not renting them out to make the incredible profits available? Are they being paid off by The Irish Times?

          1. some old queen

            Well if the amount of units available is decreasing, some of which were previously rent-able, and they are not being sold, where are they?

            What purpose would be served by not renting out an apartment or house that is in a fit state to do so?

  1. some old queen

    Why is there such a demand all of a sudden? People may not have access to the mortgage credit they had before but it doesn’t really explain why such a reduction in properties for rent. Is it down to immigration?

    1. Bruncvik

      In my apartment complex (about 100 units), there are no apartments to rent, but at least 4 Airbnb properties always available. Others reported similar (even much higher) numbers on a Reddit discussion about this. The demand may have remained the same, but the number of available properties seems to be shrinking.

      1. some old queen

        Airbnb is mainly owner occupied with a spare room surely? I very much doubt if renting a whole flat at weekends is making more than 12-1400 a month from a tenancy. I may be wrong.

        Either the supply is diminishing or the demand is increasing and nobody seems to know which.

        1. Bruncvik

          I have very limited anecdotal evidence, basically only a single Airbnb property, which is at my window level just across the street. I never see lights there on weekdays, but nearly every weekend there’s a hen party. I seriously doubt anyone’s living there.

          If I were a landlord with property I’d want to switch to Airbnb, I might’ve declared the property the permanent residency of my wife or one of the kids, and nobody would be the wiser.

  2. Kolmo

    Has anyone else noticed the irony of the largest property site in Ireland is called Daft, – People working full-time, paying taxes and contributing to society are now in very real and ever-increasing risk of homelessness.

    1. fluffybiscuits

      Hugely. Last report showed that there are approx 2000 homeless kids in Dublin alone

      We need in excess of 25,000 housing units built and that is just within the next year alone.

      25,000 units of social housing would provide enough jobs for a year or two anyways and solve one of the most glaring probems.

      1. Kolmo

        Non-recourse Mortgages should be mandatory – Removes the incentive for the banks and associated speculative interests talking-up a retarded property market at the considerable expense of those feeding the bottom of the pyramid.

  3. Nikkeboentje

    Landlords can now only increase the rent every 24 months. So there will be a big jump between the passing rent and the market rent as landlords have to make up for the fact they couldn’t increase the rent for the previous 24 months and there will be no increase for the next 24 months.
    I became an accidental landlord in 2010 when I left Ireland to work abroad. Initially I was paying over €1,000 a month on top of the rent I received to cover the mortgage, management costs, running costs, taxes and maintenance. In January 2017 when I can increase the rent again, based on other market rents advertised on websites, it looks like the rent will increase by €400 – €500 a month. Even with this increase in rent, I will still be paying around €350 towards the mortgage and running costs every month.
    It is simply not worthwhile financially (and don’t get me started on mentally) becoming a landlord at the moment and therefore without other incentives for private landlords, I can’t see additional rental properties becoming available in the market.

    1. some old queen

      But that doesn’t really make sense either Nikke. If landlords are leaving the market then there would be a glut of flats for sale, and there is not?

    2. Leopold Gloom

      It is not up the tenant to cover the landlord’s or owner’r mortgage and this is quite simply what landlord’s don’t seem to grasp, accidental or otherwise.

      It’s a capital investment. Some of your mortgage will be paid off sure by a renting it out, but at the end of the day you still have all the equity of that property. If you can have a renter cover 50% of your mortagage, have it paid off after 20-30 years and sell as you please or rent it at a probable profit, you’re going to do okay.

      1. Nikkeboentje

        The whole purpose of any investment is to make a return. Why would an investor tie up equity for 30 years where they are not making a positive annual return? If someone were to buy a property today with a view to renting it out, they would not only have to have the initial equity but also have enough disposable income to cover the running costs. In anyone’s book, that is a very bad investment. That is why there are no new private investors coming to the market and why no existing private investor is expanding their portfolio.

        1. Disasta

          So you think you should just have the flat paid for by a tenant while doing the minimum upkeep?
          How is that investment? You can’t just expect to have to put in a deposit of 30k or so and come back in 20-30 years with minimal input and it’s multiplied in value 10 fold plus.

          Or is your argument you overpaid and your tenants should suffer for it?

          It’s this retarded mentality that landlords have in this country. Expecting their “investment” to be basically nothing and get an almighty return.

        2. Leopold Gloom

          Because property is and as always been a long, and I mean long, term investment. If it was a case of buying a property and renting it out at profit everybody would do it. You basically basically service the debt and get yourself a cheaper mortgage and have the value of the house for less than you would’ve paid, but expecting renters to cover the entre mortgage is a huge problem landlords have here it seems. They moan about taxes, charges and obviously often failed to do any research.

          Eejits buying up stuff the could I’ll afford and trying to gouge others to make up for it is not the way to do it.

          Unless you’re a cagey buyer, or buying a portfolio at a discounted rate you should not be expecting a profit. If you are profiting I’d wager you’ve a cheap mortgage or are doing it off the books.

          People should be made do some serious research before being allowed to rent out property

          1. Nikkeboentje

            I actually work in commercial property investment and that is exactly how it works…you buy an office/shopping centre/industrial unit with equity and third party debt. The rental income received covers all interest payments, amortises the loan, covers running costs, taxes and usually there’s a quarterly “dividend” to the investor. If investors can get this from commercial property, why on earth would they invest in residential properties where the return is non existent as there’s a capital call every quarter as the rent doesn’t cover the costs!
            This is why there are no new private landlords entering the residential property market. There are other more profitable investments with more or less the exact same risk profile.

          2. Leoppold Gloom

            Commercial property is a different ball game completely. I’m talking about one off landlords of which there are countless numbers in ireland. who think that it’s realistic to expect that a tenant is going to cover their entire mortgage, costs, taxes etc.

            You have to expect to have some debt for some level of time, that’s the crux of it. It’s an investment and with all investments, it’s a gamble.

            Commercial properties generate revenue for their tenants if successful. It’s a business expense for the tenant. Private property is nothing more than dead money for a tenant. You’re comparing apples to oranges.

      2. Cup of tea anyone?

        @Leopard
        You don’t seem to grasp the basics that is supply and demand. a landlord accidental or otherwise can charge whatever they want for a property as long as there is someone willing to pay for it.

        1. Leoppold Gloom

          I do understand supply and demand and I know that’s one factor driving up prices. The fact that that supply has in some way been artificially decreased isn’t helping.

          It doesn’t change that the role of the tenant is not to cover an entire mortgage, when someone buys a property with this mindset they are basically setting up for a fail. Buy to let mortgages would traditionally require a greater capital investment on the buyers behalf too and have different clauses/restrictions.

          1. some old queen

            The fact that that supply has in some way been artificially decreased isn’t helping.

            How has it been artificially decreased?

        2. Disasta

          No one is WILLING to pay the high rates, there’s no choice.

          Oh I’m not paying that, I’ll live where until it’s reasonable?

    3. Custo

      Yep. That 2 year “rent freeze” was basically a free gift to landlords to bump up their monthly rent twofold last December.

  4. Nikkeboentje

    I don’t think private landlords can leave the market at the moment. I bought my house in 2002, so nowhere near the top of the market, but the current value is around €35,000 less than what I paid for it. So I definitely cannot afford to sell.
    What I’m saying is that it is not worthwhile buying a new property now with the idea of letting it out, so no new private landlords will be entering the market soon.
    The only new entrants to the market are large funds and REITs who are buying entire blocks of apartments/housing estates where buying in bulk saves on management, administration and running costs (also if they have any sense, they invest through an overseas parent company which has given the Irish holding company a shareholder loan and the interest payments are just about equal to any surplus income, so they don’t have to pay any tax!).

    1. _d_a_n_

      Here you seem to know what you’re talking about, Nikkeboentje. Is the problem not that rental properties are not coming back on the market because people can’t afford to buy? Renting is extremely expensive in Dublin, which makes it nearly impossible to save the X% neede for a deposit, which makes it impossible to gather the funds to buy and get on the ladder?

      It seems to me that the problems in the rental market are a symptom of the incredible unfairness of the residential sales market, with average property prices way out of line with wages.

      1. Nikkeboentje

        Could be Dan, but don’t forget that the government recently introduced two measures which were meant to control the sales and rental markets; limiting the LTV you can borrow and ensuring rents do not increase for 24 months. In my opinion, both of these measures have been a disaster.

        Also, everyone seems to be forgetting that if you want to save for a house, you should move somewhere with more affordable rent and commute. I used to have a two and a half hour commute in the morning and evening so I could save enough for my deposit for my house in Dublin.

        1. _d_a_n_

          I agree that those policies are completely disastrous.

          I don’t think people should have to take drastic decisions like moving two and a half hours away from where they work in order to afford a home. I also wonder how much the cost of that 5 day commute would completely wipe out what your saving rent wise, not to mention a persons quality of life or family commitments. Why should a person have to make such drastic sacrifices anyway, is that not in itself a sign of an unfair society?

          It just seems more and more impossible to me to stay in Ireland, own your own home and raise children, and the main factor is the enormous property asking prices. It seems completely inadequate at this stage to throw our arms up and say ‘that’s supply and demand’, I think down the line there’s another collapse in the market coming, mainly in Dublin, I see my peer group with really good jobs completely unable to buy and a huge feeling of disillusionment around. We just sleep walk through it in this country, as long as we can make it month to month and afford pints, it can’t last.

          Anyway, thanks for getting back to me!

        2. Andy

          Wow,

          The GOVERNMENT DID NOT introduce the mortgage caps.

          The Central Bank introduced them. And with good reason – to put a break on rising house prices.

          The GOVERNMENT (like the populist gobxxxxxs) and most of the opposition actually want those caps removed so people can Borrow even more for the same property.

  5. Turgenev

    There’s no need to build up. What is needed is compulsory purchase at market prices (for houses in their condition) of the quarter-million untenanted homes. Will Fine Gael do that? Will they copulate.

  6. dav

    fg – keeping the recovery going… for vulture funds earning millions and only paying €250 in taxes, bravo guys

    1. Nikkeboentje

      If it wasn’t for opportunistic funds, there would be a lot more properties sitting vacant in Ireland at the moment. At least these buildings are properly run and well maintained.

  7. Leopold Gloom

    There is a need to build up though, but it has to be done with some real forethought. No boxy holes that are barely good enough for a dog. Properly planned open planned apartments, with 2/3 bedrooms, maybe even over 2 floors, shared outdoor spaces, proper amenities for folk, secure indoor bike spaces etc etc in and around the docklands, city would immediately free up some property.

    Far too many rubbish identikit apartment blocks that have only 4-5 floors and have no thought to how space could be actually used well. No forward thinking, no originality.

    Building up might suits corporates too and free up land where awful blocks are built wig a huge foot print but next to no square footage due too limitations on storeys .

    Backwards country

    1. Nikkeboentje

      I completely agree with you. I live abroad, very close to the city centre, in a 110 sq m apartment. I have my own garage, store room and laundry room. This type of apartment is suitable for family living. For the first time in my life, I am happy living in an apartment and have no yearning for a house.

    2. Kieran NYC

      “There is a need to build up though, but it has to be done with some real forethought. No boxy holes that are barely good enough for a dog. Properly planned open planned apartments, with 2/3 bedrooms, maybe even over 2 floors, shared outdoor spaces, proper amenities for folk, secure indoor bike spaces etc etc in and around the docklands, city would immediately free up some property.”

      In Ireland? Hahaha nice one.

      Apartments will be built to the minimum standards and not a penny more.

  8. Kieran NYC

    “There were just 3,600 homes to rent nationwide on August 1st — 1,000 fewer than on the same date a year previously.

    The numbers for Dublin are lower still, with just 1,100 properties available to rent at the start of May.”

    You mean there were fewer homes for rent in a smaller geographical area than in the country as a whole?

    You don’t say.

  9. some old queen

    With all this hardship I kind of wonder has anyone actually sat down and figured out what is going on. Surely there must be some academic out there who can join the dots?

    Either way more people are in need of rented accommodation or the amount of units is being reduced. If some units are being removed then why?

    There are raisins for everything and currents for bread. Come on Social Democrats, this should be one of your bread and butter issues.

    1. sǝɯǝɯʇɐpɐq

      Currant Buns are not your forté, queen of tarts.
      You can’t even spell it properly.

      I don’t want to inSULT AN Angry person like you so I’ll shut up now.

    2. some old queen

      There are raisins for everything and currants for bread. Is that better? It’s an old one, a bit like myself.

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