Actually, I don’t think residential rents have a hell of a lot further to go. I live in a nice apartment in a nice area of South Dublin and even if I use a very generous (rent x 12 x 16) formula I get 170k, which seems about right to me. On the market to buy it would be twice that. It is the selling prices that are out of whack big time, not the rents. Just IMO.
Either the Irish economy is banjaxed or it isn’t. If it is there’s no saying how far rents will fall. I shouldn’t have thought the rental market was the kind of market you could talk up because unlike mortgages, leases can always be renegotiated.
Units that are rented may not see falls of any great note simply because there’s an artificial bottom to the market provided by the HSE Rent Supplement. Whether that bottom remains this time next month remains to be seen.
The other key point is - those units which are rented. Average rents may not fall a huge amount. Average rents per available unit is another thing.
Expect longer void periods and higher expectations from tenants. More taxes and lower tax reliefs. Oh yeah, it’s all good.
If you consider that people should spend about 30% of their net income on shelter then you need to be earning €40k+ just to get a really crappy one bed. Frankly jobs that pay that kind of money are becoming increasingly sparse.
Rents have plenty of room to fall but I don’t think they’re going to continue collapsing at the current rate.
Apparently Savill’s believe that once Mr. Lenihan sits down after reading his speech next week that that is the *end *of the budget. Ditto NAMA, which is ancient history by now, right? Really, what can you say?
It will not fall further in actually good places to live. It will crash to the floor in worthless extra-urban townhouses with views over unfinished motorways. People may not want to buy at the ongoing high purchase prices, but e.g., there are only so many higher-quality well-located apartments in Dublin, Cork, etc., . These will continue to have plenty of takers.
Well this is where it all comes back to location, location, location. It’s why Marylebone or Mayfair always commanded high prices even when the IMF was in the UK, or why Altstadt in Munich still has prices going up while other areas that went up in the boom are dropping. An apartment in e.g., Clarion Quay (blocks 1-7, not the others) or Mount St. Annes, Sweepstakes are much more desirable. Likewise apartments next to hospitals will have a higher rent for staff like doctors or nurses.
There may be some drop, but going from €1400 to €1300 in a sought after area is very different to going from €1200 to €700 e.g., DUblin 22 or 24. The country isn’t a commune.
Some people have falling wages and are unemployed; others are making more now than 2 years ago.