First time I have seen a 2 bed below 2K in The Gasworks. If this is the start of a new downward trend then many less desirable developments will have to start to price accordingly.
€1995 Oct 12
€2,100 Oct 05
€2,194 Sep 24
Link?
Assuming a comparative absence of students vis a vis other years, youd have to assume we would begin to see a good number of rental drops by the beginning of November.
The first two pages of Daft searches are still dedicated student accomodation which appears to be still empty.
109 2bed properties in D2 and D4 at the moment
many with 100 to 300 in price reductions
2 Likes
Tons for rent but it doesn’t seem to be translating to landlords exiting the market for some reason. There is still relatively limited stock for sale and no more than usual hitting the market, at least from what I can see. If there was more hitting the market I expect we would see clear price drops vis-à-vis comparable properties that sold in 2018/2019 because my impression is that peoples’ appetites for apartments, both owner occupiers and investors, in D2 & D4 has dampened significantly for various reasons.
Edit: Adding link now!
I guess many hope that there will be an upturn next year. There is still a load of places up on Airbnb (unless they were never taken down). If the council actually used this opportunity to act on these you might see another step decrease in rents. If owners then saw a further fall in rent some might decide to head for the hills.
Head for the hills?!
You mean - sell sell sell!
Is there a moratorium on evictions in Dublin?
What do these apartments sell for ? A rough rule of thumb applied globally on apartments is that a 'fair value ’ is about 5% gross yield. So at 2k per month you’re looking at a price of about 480k.
Up until recently there were apartments on Dublin yielding 7 and 8% . This is highly unusual internationally. End story is either investors drive the price of apartments higher which drops the yield, or investors fund the supply of apartment blocks, which reduces rent and drops the yield.
Here we have a global demand shock which is having the same effect. Rental yields at 4 to 5 percent is entirely normal looking internationally.
You need to factor in mmgt/agency charges into that 2k as well. I am guessing they are not cheap in the Gasworks. If there are now rental voids in addition it further calls into question why investors would have a strong appetite for somewhere like this if it would cost ~500k to buy.
The other elephant in the room is the current amount of empty new builds and which are going to be added to over next couple of years. That will surely further depress the rental value (unless the REITs can continue to ignore the incoming tide of course).
Management/ agency charges will be applicable on all apartment investments globally. That’s why you look across on a GROSS yield basis. At 2k per month on a 480k outlay you’ve got a 5% gross yield. Looking across assets , stocks are at 3% and government bonds are negative. 5% gross is an attractive yield.
Looking across other European capitals at rental yields 5% gross is attractive. The last place I rented before moving back to Dublin was an apartment in London at 1.8k per month. This had sold the previous year for 1m . That’s a little over 2% gross yield. Yields of 2 to 3 % are not unusual in the UK.
The rental yields we saw previously in Dublin were highly unusual and the sign of an extremely malfunctioning market with restricted supply. Rents at 4 to 5 % is a sign of some normality returning.
If those apartments are selling at 480k the ‘fair’ rental level in a normally functioning market is about 1.7 to 2 k
I know someone who recently moved here and is paying 2.1k in GCD (that was in the mid to late summer). If the marquee developments are now in or around the 2k mark then the correction in rents might happen quicker than I would have expected.
Just down the road and a 2 bed 2 bath for 1750
Gone now. Shows the market is there if priced correctly.
Is there a premium also for how difficult Landlords have found it to evict in Ireland in recent years, and
a culture of overholding etc?
I suspect there is some risk premium in Irish property for this vs the UK or the States for example