Rents hit record highs

10% of the population is non-national at the time of the 2006 census (say 400,000 people), yet the number of private rented dwellings only increased by 3,858 units in 4 years. Yet we know investors were 40% of the drawdowns for new mortgages in 2006. It would seem likely that Canny McSavvy bought off the plans at the peak, those new properties are just ready now and also flooding the market??

Yes, as someone looking for a rental I can attest that a large percentage of those on offer are being let for the first time, at least in the areas I’m watching. And far more than I expected use agencies.

Did they not mention that houses were pulled from the rental supply and put on sale which lead to further constriction in the rental market?

That was a terrible article. There were so many VIs quoted it almost felt like it was written down the pub on Friday after work with every 2 bit estate agent and property economist sitting round the table moaning about work. The analysis was non existant and the statistics quoted were cherry picked and mis-leading.

Paper never refuses ink :slight_smile:

Just a theory of mine I’d like to put out:

Over the last couple of years, the pace of building has quickened and quickened (up to 80 - 90,000 in 2007). In this period, the proportion of FTBs has been steadily decreasing, whilst the number of buy-to-letters (i.e. trader-uppers holding on to their original properties and Canny McSavvys buying third and fourth properties) has increased. The natural conclusion of all this is that the number of rental properties available is also accelerating (shifted forward in time from the 2007 peak). The acceleration in rental property is not only related to the sheer numbers of properties being built, but also the increasing proportion of Canny McSavvys and trader-uppers holding on to their properties (compared to FTBs and trader-uppers who sell their old properties before buying a new one). I’ve obviously not put any figures on this analysis, but it would be interesting to predict: when will the acceleration of rental property coming on-stream end? What is the acceleration rate? What will be the peak number of rental properties available?

I think we’ve broken the buy-to-let equilibrium and we’re now on an exponential rise upwards (as far as the number of rental properties available is concerned). How high it will go, I don’t know. But an exponential rise in the number of rental properties available will have serious downward pressure on the money landlords can charge. 12-month leases will have a filtering effect on prices, but eventually, things are going to get very, very bad for BTLers.

The numbers are misleading. The article only quotes private rentals. According to the CSO there are 156,000 units rented from local authorities and voluntary bodies, i.e. the true number of rentals in Ireland is north of 20% of inventory. If you consider the number of vacant houses for rent that are not counted in this statistic then the number of rented properties could be considerable higher.

See … ortId=7284

Furthermore the same figure for the US is more than 30%. That means there are a lot more owner occupiers in Ireland than in the US. So who is going to buy the 10’s of thousands of new houses that the VI’s are forecasting will be built? … n06t9.html

Rents which were rising by 2-3% annually for the past few years in the US rose by 0.5% (fell in real terms) last year. The US has fewer empty properties than here in Ireland, 9% of the housing stock (including holiday homes) compared to 15% plus here.