Daft: Rents fall 5% in first three months.


#1

rte.ie/business/2009/0506/daft.html


#2

This was reported as ‘bad news’ on Newstalk this morning. :unamused:


#3

As a tenant it brought a smile to my face… :smiley:


#4

More ‘bad news’ for the Newstalk jocks. The fall in rents reported by Daft is a drop in asking rents, tenants should be offering about 10% less than the landlord is quoting.

The Daft report.
daft.ie/report/Daft-Rental-Report-Q1-2009.pdf


#5

Ronan…this is directly squarely at you.

On newstalk this morning you further purpetuated the widely held view that a low cost of accomodation is a bad thing.
You presented a news section that “falling rents” is a bad thing.

“An end to the bad news” refering to a levelling off in supply…which you were inferring might stablise rents.
You’re brief report presented falling rents as a bad development.

Surely you can see this is a good thing and might help the country move in the right direction?
Rents are still too high.

I can’t post a link to the report but you should be ashamed Ronan.
Low rents are a good development…and a small step on the road to recovery.


#6

Hi guys,

A couple of report-related resources:

All comments and suggestions welcome, as per usual,

R


#7

Why did you present this as bad news Ronan?

Surely the cost of accomodation falling is a good thing?


#8

Hi Django_returns,

Fair point - as mentioned elsewhere, Newstalk (and RTE) have taken this up as a “bad news” story. The original press release merely explained that rents were falling because of too much supply (overconstruction) and not enough demand (emigration).

The “end to the bad news” in relation to the oversupply was a point precisely about that - over-construction was bad for the economy, even if it felt good at the time, and we’re feeling the hangover of that now. Neither rents going up 25% rapidly nor going down 25% rapidly is good news from an economic stability point of view, so presumably you can understand the news outlets seeing the latter as bad news - independent of the fact that it’s quite clearly good news for tenants. What people want to see is that we’re working through the ‘steps in the right direction’, as you call them, which are going to be very painful. I wasn’t exactly able to give them that, but I did note that the number of properties available to rent had levelled off in the last month - for what that’s worth.

On a recent rental report, the exact opposite message went out - that this was unalloyed good news for tenants, in uncertain economic times. Each report is taken up its own way and all nuances can’t be got across unfortunately in a 30 second or 60 second slot.

Hope that makes sense,

R


#9

(From other thread on same subject)

Hi Django_returns,

Fair point - as mentioned elsewhere, Newstalk (and RTE) have taken this up as a “bad news” story. The original press release merely explained that rents were falling because of too much supply (overconstruction) and not enough demand (emigration).

The “end to the bad news” in relation to the oversupply was a point precisely about that - over-construction was bad for the economy, even if it felt good at the time, and we’re feeling the hangover of that now. Neither rents going up 25% rapidly nor going down 25% rapidly is good news from an economic stability point of view, so presumably you can understand the news outlets seeing the latter as bad news - independent of the fact that it’s quite clearly good news for tenants. What people want to see is that we’re working through the ‘steps in the right direction’, as you call them, which are going to be very painful. I wasn’t exactly able to give them that, but I did note that the number of properties available to rent had levelled off in the last month - for what that’s worth.

On a recent rental report, the exact opposite message went out - that this was unalloyed good news for tenants, in uncertain economic times. Each report is taken up its own way and all nuances can’t be got across unfortunately in a 30 second or 60 second slot.

Hope that makes sense,

R


#10

Fair play Ronan for coming and answering. I see your point about each news outlet taking a different stance, but I’m sure it doesn’t take 60 seconds to get the message across that falling property prices and rents are good news since it frees up valuable capital that can be put to better use in more productive areas of the economy.


#11

It is an interesting problem .

There are up to 450,000 rentable properties in Ireland = (Empties + Private Rental Sector Today) - Holiday Homes .

There are only 200,000 or so renting households

For every 2 potential landlords such as Newstalk Radio Show hosts there is only one potential customer out there .

In the UK (IIRC I could be wrong) there are 4 private rented properties+empties for every customer meaning that for every 2 potential landlords there are 8 potential customers .

This would tend to mean that the UK landlord has far greater pricing power than a typical Newstalk Presenter who dabbles in property and is stuck with an unrentable shoebox in Navan that they choose not to disclose on air .

2Pack finds himself repeating himself for the benefit of the thickos over in Newstalk .

It’s The Empties STOOPID !!

If anyone feels I am wrong about those numbers…then PROVE it :smiley:


#12

Ronan,

I am unsure what your own personal opinions are regards to the cost of property and rent.
I believe it is as clear as day to anyone with even the slightest understand of econommics that both are monstrously high.

The point you put across was that rents were falling and the levelling of in supply should go some way to stabilising that.
I understand time constriants may cause you to mis-articulate but that is how it came across.

My point is rents are currently too high and a correction, slow or otherwise is a good development for the economy. Newstalks stance, and by default yours, was that falling rents are a bad thing.

Wages are stagant or falling, if people are to maintain disposable income than the main component of cost of living must fall…accomodation.

I understand you are going out on a limb on newstalk but either you believe falling rents are bad or newstalk railroaded you into presenting that.


#13

I’d say 5% is quite a conservative estimate as it doesn’t take into consideration those who have renegotiated with their landlords - I’d say it’s more like 10%.

And yes, why this is classified as ‘bad’ news is mystifying…


#14

My personal position is that any restriction in supply , as measured by reduced construction activity, is more than compensated for by the number of ‘accidental’ landlords out there who bought to flip and got landed with the flip.

Ultimately the private rented sector is dwarfed by the number of empties out there…even in the cities where at least 10% of the housing stock is empty …never mind Leitrim where 1 in 3 properties is empty.


#15

Last time I checked the cso it was 144,000.


#16

Thats even worse Django :open_mouth: , I was sure the private rented sector was around 200k households . DUH!!! I added Voluntary Sector to Private thats why !

Rented Sectors in Ireland .

Private = 144k
Private + Voluntary = 200k
Private + Public + Voluntary = 300k .

Table 21.2 and onwards of this CSO report has all the data and Django is of course correct

cso.ie/releasespublications/ … useh…pdf

(144k rented + 350k empty) - 60k holiday homes = 434k marketable properties to a market of 144k households .

let me reword so

Becomes

For every 3 potential landlords such as Newstalk Radio Show hosts there is only one potential customer out there .


#17

Well, if something shoots up 25%, then coming back 25% or more actually is good for economic stability, it means we’re heading back to more sustainable levels.

When rents or house prices fall a few percent, the tagline should be “a lot done, more to do”

The national income has collapsed, and it’s bad news that one of the biggest national expenses is falling? We need a country that costs less to live in and run. We’re not as reach as we had been told.

There’s no ambiguity or interpretation here. Falling rents and house prices are a good thing. It would be better of people had listened and not gotten caught up in the boom. Those people will get hurt. Falling rents may be bad for them.

Better detecton of drunk drivers is bad news for the drunk drivers, but it would never be spun as a bad news story.

Some people even still, with everything that’s happened STILL…DON’T…GET…IT.

-Rd


#18

If I’m honest, I tend not to notice consistent slants by particular outlets (although I admit launch day can be a bit of blur!) - I’ll be on my guard, though, in future and will be sure to make the point about falling rents being good news from an affordability/cost of living point of view if I feel it’s being dragged the other way.

On your last point, falling rents are not bad (they’ll help us get our cost base back into line), but the pace of adjustment is an indication of the scale of the problem Ireland faces.

Good to get honest feedback - at this point, even the relations have stopped texting when they hear I’m on (“Oh, he’s on again”), and they were an easy audience anyway!


#19

The pace of the adjustment, 5% in a quarter, is very noticeable .

The gap between asking ( rent) and clearing ( rent ) is much smaller than the gap between asking ( sales) and clearing (sales ) too. Potential landlords price better :slight_smile:

It is also the reverse of say 1998 when rents went up about 5% a quarter Q on Q .


#20

Having had to let a couple of properties in Cork City, the rents are down c.17% (e.g. 2 bed apt. from €1100-€900, 1 bed from €850-€700) from last year (which was the high point). The drop in the last quarter “feels” particularly strong.