I think that Daft are only now facing up to the facts because they are beyound denial. This 2% fall since Jan is a sop. It is my view that rents have been falling for a year.
Can anyone support, or reject, my theory with stats. How far back do the reports on rental drops and rises go? If we could compile these to show the numbers of drops versus rises over the last year it would help nail down the argument. I there a website that shows these i graph form?
Rental inventory has been rising and rising and rising but prices haven’t adjusted downwards. I’m gobsmacked at the prices for apartments around my area. One in my complex is €400 more than I am paying. I pay €1300 for a large 2 bed in Clontarf. I’ve been expecting them to drop back towards what I’m paying, which is the same as I’ve been paying for 3 years now but it just hasn’t happened yet. There isn’t a hope of the place renting for that amount, but €100-€200 more (€1400-€1500) is about the going rate. Renting is a weird game in Ireland. Prices are sticky. Seems amateur landlords would rather sit and wait than drop the price. I don’t get it but there you go. Also just look at the price of somewhere like Swords. The prices in Dublin don’t drop much for the poor quality of an area, seems more related to the newess of the place and thus high mortgage. I guess in the internet and free online info I expect things to move quicker.
Not so weird when you think about the average Irish person’s attitude to negotiating and shopping around for value. There is an amazing willingness to be led by the nose when buying things in this country.
It seems to be analogous to what has been happening in the sales market. Just like when it comes to sales, the attitude among some landlords seems to be that they are not prepared to rent their property for less than what the consider to be its intrinsic “value”. As a result in the short term I’d expect to see the number of vacant properties to keep increasing, rather than seeing substantial decreases in asking rents.
Indeed, there’s no consistency at all. For about the same as a new 2 bed in Finglas you’ll find relatively new 2 beds in Blackrock or Clontarf.
I have been keeping a close eye on rents. Just one area though. Dundrum. I can tell you Dundrum has only been fropping for around 4 months.
They have been very sticky. I think the reason they haven’t collapsed altogether is down to the need for LLs to cover at least as much of their mortgage that they cannot afford to pay. Dundrum has a massive oversupply in brand new apartments. By rights the rent should have halved.
It has not because each LL has paid a fortune for their unit and the mortgages are way above 2000 euros per month. Simply put they havn’t a hope of getting that. Max they were able to ghet was 1600. Now they are struggling to get 1500.
I think the LLs in Dundrum are on a do or die wait. They are not reducing rent cause if they do then they are gone and will go bankrupt as they can’t afford to pay the supliment to meet the mortgage. So they sit tight and hope to God they get a tenant to cover their arses.
Now since there are no tenants willing to help them they will wait for the banks to reposses all the while praying for a rich and foolish tenant. They can do nothing else. That’s why I think the banks will wait a few months before starting proceedings then the proceeding will take a few months. I expect the end of the Summer to start the first of the repossessions.
Of course I could be completly wrong.
I agree with you BB - fear may have started, but it is mild enough compared to what it will be when we see the first front page stories of middle class landlords with properties in good areas being repossessed - “it was our retirement money”, “we remortgaged our PPR on the advice of our solicitor/accountant/doctor/shoe shine boy to buy this”, “everyone else was doing it, we thought we couldn’t lose”.
I’ve been watching rents in various parts of the west inner suburbs for the last year. In one development one bedroom apartments were asking about 1050 late last year. They’ve now slipped to 900, but it’s been a slow move, very sticky.
Yeah, the only landlords that can afford to drop are those who bought pre-bubble. The rest have a choice of a) bleed to death slowly by subsidising as much as you can afford or b) live in happy-clappy-everything-is-wonderful Denialworld convinced that “it’s just a blip” and a mega-bucks tenant will walk in the door next week, while you bleed to death extremely quickly.
Combined with the “one last holiday” effect, and it’ll be October when people just can’t keep codding themselves any more and are forced to fold. But those bleeding to death slowly will grimly hang on in there, possibly for years and years and years to come.
Imagine poor Canny now having to eat humble pie having told all his mates about how great it was being a landlord, how he’d be retiring aged 40 and how his tenants were paying his IO mortgage.
The perception of Canny Mac amongst his peers is an acutely powerful force that will cost him dear: A professional investor would simply cut his losses and walk away. Indeed, a professional investor would never gossip about his business dealings down in the pub.
it’s been a long long while since i last heard someone bragging about their house(s) value/profit etc. my two mates who bought with 100% mortgages in 2006 are very very quiet these days. They were telling me i was a fool to be paying rent at the time…
Rents don’t differ hugely between likes of finglas and clontarf for among other reasons,
People who rent here generally have lowish income(recent grad, social welfare, minimum wage) so people havent ability to raise rent to reflect nicer area.
In areas like Finglas there is a much higher proportion of people getting their rent paid/subsidised by HSE and this sustains demand and prices in an area as people getting rents paid by government dont want to move from the area they were brought up.
If rents in Clontarf were to raise significantly a mortgage for a new property further out from Dublin would become attractive and rental demand would drop. Dublin is also quite a small city so renting in a less nice area does’nt matter much in terms of commuting as it’s easy to get around in roughly equal times from poorer/nicer areas to workplaces which tend to be based inside and around m50
No I’m afraid that doesn’t make a lot of sense. Sure there are less desirable areas that would be handy for commuting to the city centre - Fairview comes to mind in this case. But assuming you need to get to or go through the city centre, your commuting experience is going to be considerably different if you live beside the Dart in Clontarf as opposed to near Finglas village. Also this discrepancy in prices applies to other areas within the M50 that have poor public transport links and serious traffic problems.