If AirBnB (or similar) never existed, what would rents and house prices in Dublin be today?

Given that AirBnB has been effectively banned in Dublin and that few appear to have applied for planning permission to continue, I was wondering what people believe rents and house prices in Co. Dublin would be today if AirBnB (or similar) never existed.

I suppose I’m trying to figure out what the real impact of AirBnB has been on both rents and house prices in Dublin and what it’s ban really means for both of these going forward by working backwards.

I am guessing it affected rents for more than house (or apt) prices. I think we can see already what impact it has had on rents (the drops are also due to people leaving their places of course). I think many Airbnb owners probably thought (or still do think) that this is a temporary one year hit and might be planning on returning sometime in 2021.

Good points and the impact on rents appears to showing already. As you said, it seems to be partially to do with the WFH in addition to the AirBnB issues (ban/ lack of tourists).

But, wouldn’t an investor (especially in the Docklands area) have previously purchased at a price that took into account the lack of rental accommodation in the area due to AirBnB and therefore higher potential rents?

If AirBnB is truly banned (is it really?) and these units begin to re-enter the long-term rental market, shouldn’t the reduced rents (yields) feed through (eventually) to the selling prices that can be achieved?

I don’t think Airbnb has been effectively banned. Govt spoke about measures but nothing actioned yet

True. I guess I meant in relation to requesting planning permission and the minister advising county councils it should be refused in most circumstances in rent pressure zones.

I read recently that only 7 had applied for this planning permission, so I wonder, especially as the councils should already have a dedicated unit in place to monitor AirBnB breaches, what’s going on as shouldn’t these units have re-entered the long-term rental market at this stage?

One of the bigwigs in Airbnb seemed to indicate recently that they made errors with their strategy and would look to co-operate with authorities in the future…now it might just to deflect attention in advance of their IPO…

For me now the bigger issue is the empty units that the REITs have. That coupled with the desire to change planning for student places would deliver a whole deal more of supply in short order which would be reflected in lower rents pretty quickly I would have thought.

You’re 100% right. The point campus down by the three arena already is requesting to change 600 of their student beds into residential. Between the student units and the ex-AirBnB properties, there may be (I think anyway) the equivalent of a years worth of new build residential housing supply about to enter the market in the next couple of months?

Also I think investor mortgage drawdown figures from the BPFI.ie are indicators. The volumes are negative from early last year.

2020 q2: -48% (YoY), 2019 q1: -22% (YoY), 2019 q2: -10% (YoY), 2019 q3: -23%(YoY)

(Can’t find 2020 Q1 or 2019 Q4 on the website - if anyone has those figures that would be great?)

If investment for letting, student accommodation and airbnb has stopped/significantly decreased, that leaves a lot less competition for FTBs and trader uppers or downers which has got to effective sales prices. If rents are going down (increased supply from AIRBnB sector) that also has to effect sales prices as there will surely be less people attracted to buying when renting is more affordable. The only plausible argument I can see at the moment for prices staying the same seems to be the “pent up demand” argument. On that, this article below on San Fran is interesting:

All those points make sense and thanks for the link to that article.

From article: "The second difference is the methodology. The Case-Shiller Index uses the “repeat sales method.” It compares the sales price of a house that sold in the current month to the price of the same house whenever it had sold previously. To make it into the index, a house has to have been sold at least a second time.

I like sales-pairs as a method because it makes the index immune to changes in the mix of houses that sold. Changes in the mix can heavily skew median price indices."

I know there’s a few very competent statistics guys/girls on this forum. Would any of you be able to easily replicate a similar index for the Irish market or is there a similar one already?

I wouldn’t be holding my breath on the REIT’s dropping their prices as I suspect this would affect their valuations quite a bit and if some of them might be looking to bail soon enough then they might be hoping not to take too much of a hit.

Now if there government was in any way serious about delivering cheaper rents all round one might be inclined to think they would take action in this regard…with them being the biggest tenants out there…

Good point. But the chief executive of Irish Reit back in 2016 said “We’ve never seen rental increases like this in any jurisdiction that we’re aware of.”.

So, if the market does turn and the Government doesn’t continue to step in to keep their rents and occupancy levels high through HAP, long-term leases etc., they may be surprisingly more willing to reduce rents than we all think as they already believe they’re making too much of a killing here. Given that they’re publicly traded, they can’t hide their vacancy levels (if they do start rising) for too long (I would assume).

Link to the article with above quote here: Ireland’s biggest landlord: ‘I feel bad for the Irish people’ – The Irish Times

Just to add… some AIRBnB numbers:

From an article in IT in January 2019

“According to AirDNA, there were about 6,228 active rentals in Dublin on the platform in December, up by 1.4 per cent on the same period in 2017.

And many of the listings are for apartments or houses rather than a room in a shared house. According to AirDNA about 3,000, or 58 per cent of all listings, are for entire properties”

Article here: Dublin’s top-earning Airbnb property pulls in €230,000 a year – The Irish Times

So the question is, what is going to happen all these ex-AirBnB properties and will they start to enter the long-term rental or sales market in the next couple of months? Or, will they really hold out until next year in the hope of a rebound that may not happen?

They also have the added headache of “the Revenue Commissioners are to launch a special audit crackdown of Airbnb hosts after analysing the results of a letter campaign to 12,000 providers of the short-term letting service.”

Article link from December 2019 here: https://www.independent.ie/business/irish/airbnb-hosts-at-new-risk-of-revenues-special-audit-crackdown-38786009.html

DCC have rented at least 300 of them on medium term leases to house homeless since the beginning of the lockdown.

Thanks for the information. What do you think would be or are the medium term leases be e.g. 1,2, 5, 10 etc. years?

An initial 6 months I believe. A lot would be block booked from single companies such as Staycity of whom I’m not sure whether they advertised on Airbnb. I don’t work for the council so I can’t say for certain but my sources indicate that there might be some interesting names thrown up if anyone ever started sniffing around the ultimate ownership of these apartments…