CSO - rents: -0.9% in April, +2.4% over 12 mths

cso.ie/px/pxeirestat/Statire … =0&PXSId=0

Cuts in RA taking effect in April?

Surely if RA was cut by 8% approximately and it accounts for 50% of the market the fall should have been 2-4%

Maybe they are lying to us :frowning:

Either way I am surprised the fall was not larger.

If I recall correctly the source data for rents is provided by EAs

Are you seeing bigger drops on the ground?

In D2 & D4 rents are down approx. 5% in the last 2 months.

However that is after a substantial increase of approx 20%.

The issue with the reduction in RA is that it is forcing SW receiptants to move to cheaper parts of Dublin.

Thus there are more low quality apartments on the market being down the average.

Once the RA people move I would expect to see rents to start to increase again.

If any upward pressure manifests itself on the RPPI over H1, I’d expect rents to soften in same locales, due to shifting demand patterns.

The CSO index is not a measure of available rental rates, it’s a measure of the average of what all renters are currently paying.

Rates are set at the margin. If 1 house on a street sells for X+/-10K then all houses are deemed to have that value. However the other house owners don’t suddenly find their mortgage going up by that value.

Similarly with rents. Asking prices may have risen by 20% in some areas due to demand pressures are fallen by 8% in others due to RA cuts but the average rates paid may only see a 2% rise/0.8% fall as only a proportion of leases come up for renewal during the time period and the higher asking rates don’t effect existing tenants.

Per DSP, in 2010 there were 97,260 Rent Supplement claimants.

Per PRTB 2010 Annual Report, there were 231,818 registered tenancies, of which 494,659 tenants.

public.prtb.ie/DownloadDocs/PRTB … ersion.pdf

So 97,260/494,659 = 19.7% of the total tenant market is paid for by Rent Supplement

PRTB caveat: These figures however should be read with some caution as there is no requirement for a landlord to notify the PRTB where a registered tenancy has ceased.

So the 494,659 figure is no doubt overstated. Then again, there are the unregistered tenants also.

The RA drops from Jan 2012 have not yet been completed in many counties.

For eg Galway is only starting to implement them now, whereas some areas began in Jan.

Slightly related:


Whats with education up 9.4%?!

Hm, so let me get this straight.

Once all the deadbeat welfare recipients move out of the nicer areas and free up properties there, those properties will then be snapped up by a better class of renter, thus forcing up rents.

Is that it?

I am immediately compelled to ask where these better healed renters were till now? Because you seem to be saying that were it not for all those RA recipients clogging up those properties, there would be an alternative pool of people prepared to pay more who have till now been blocked from doing so because of the RA folk.

That’s not what I took from Landlord’s post. He seemed to be making a perfectly cromulent point.

There are a disproportionate number of low quality units coming to the market in certain areas, thus bringing the average asking price down. Once a more normalized market returns the average asking price in that area should begin trending upwards.

Now I’m pretty sure the CSO stats do take unit sizes into account and only compare like with like. Averages in areas shouldn’t be affected by issues of weightings. And as I mentioned earlier asking prices and average rent are 2 different things.

Are we not talking about movements in Averages?

RA previously was capped at €950.

Current market rents are in excess of this figure.

Thus a higher average for the area.

This is an area which has already show large rent increases.

Any thoughts on explaining the 20% increases in this area over the last 12-18 months?

Do you have a source or just anecdotal?

All graphs have been provided by Coles 2


Sorry, I may still be picking this up wrong.

Are you saying that RA is artificially keeping average rents in this very nice area down, so once those people are moved on, prices will settle at a higher level? If so, I am again compelled to ask: why were landlords suffering all these low-paying renters and why hadn’t they moved them on sooner and replace them with the higher payers?

Or, is your point that when these people move out, their former apartments will be taken off the market, thus reducing the absolute number of lower priced apartments and thus the average rent? If that is your point, then increasing average rent seems like scant consolation for landlords if they’re having to shut down other parts of their portfolios.

Yes. There are only 11,000 mortgages being released per annum. That is not enough to meet demand and thus people are renting. Since renting is so much cheaper than buying, a lot of these people have (or think they have, relatively speaking) enough income to live in the nicest parts of Dublin.

No real rocket science here

The apartment is currently rented for €950 per month. (Previous RA cap)

SW requests that the rent is reduced to €875 per month.

Landlord declines and re-rents property for €1,100 per month

Why aren’t rents across the market increasing?

Why only certain areas of the market?

Actual rents take time to adjust.

SW’s request that landlords take a rent reduction is a “call to action” to check what the current market rent is.

Landlords can only increases rents once every 12 months.

Rents in D2 & D4 only really spiked upwards in the last 6-9 months.

In fact it is SW who are encouraging tenants to break leases and leave if landlords do not reduce rents.

As it turns out this strategy suits landlords in the area.

If, as the topic says, rents rose +2.4% over 12 mths, that is quite a lot.

AFAIK, RA did not rise during the period - or am I wrong? So that doesn’t account for it.

Also if I remember correctly, it was pointed out a few months back that CSO methodology in this area understates market rents because their data is collected from mouldy flatland-style dumps - so they may be missing the increases recently pointed out in the Coles2 Report for family 3+ beds in areas such as D4, which have seen relatively high growth rates.