Residential property rents fall to 2-year lows (Irish Times)

irishtimes.com/newspaper/breaking/2008/1117/breaking52.htm

Both falling values and falling rents. What does that tell you?

There’s never been a better time to buy, or rent!

Er, assuming you are young and don’t remember what life was like before the bubble…

Empties everywhere?

Whats the rental index from Oct 2007 to Oct 2008?

Daft is now at 19,663. Soon 20k, What happens next?

I am going to go out on a limb here and say that the answer to your question might be 21k.

Not published by Daft yet. But the index is back to where it was in 2002, when we had about 350,000 fewer homes than we have now.

the empty gaff fairy comes and fills the gaffs with high income young professionals willing to pay 1500 a month for two bed apartments, no more gaffs come on the market for rent and all the cannies are saved

or

the graph keeps goin up

dunno - people are not buying because banks won’t lend them money
they have to live somewhere

These predictions are useless because there are different geographic markets and within geographic markets there are different segments (e.g. regular apartments, lux apartments, semi-detached family homes, etc.). What happens in one segment may be completely the reverse of what happens in another segment.

The most immediate reason for the current state of house prices is the lack of mortgage lending available. However increasing unemployment / lower incomes will soon start to contribute to the malaise.

The state backed rent allowance effectively puts a floor on the rental market

if people start to be evicted from houses they bought, they have to live somewhere

They’re not buying because

  • prices are still far too high
  • it makes more sense to rent than to buy in the current market
  • buying into a falling market means risking negative equity
  • they expect prices to be cheaper in 12 months time, so they’re prepared to sit & wait
  • they can’t afford to service the size of mortgage they’d need to take on to buy something they like and they won’t buy a poky shoebox in the middle of a half built muddy field just to get on ‘de ladder’ anymore.

:angry:

I seriously lol’d at this

Just curious, but how does the rent allowance put a floor under the rental market?

Also, based on the continuing increase of rental supply would you not agree that it is likely that average rents will to continue to fall in the near-term (say 6 to 12 months)?

heh heh - if all those reasons are true then people wouldn’t have bought up until last year now would they
sentiment has changed and prices are falling so there is an element of waiting to see but banks not lending and concern over employment i think are reasons for people not buying

yes there is downward pressure on rents but normally unemployment, lower wages drives down rents too but in ireland the state will step in and pay your rent hence artificial floor in rents

IIRC house prices starting falling before the banks stopped lending.

probably true

but are you saying banks not lending is not a factor in falling house prices or are we arguing over its relative importance

I would say them requiring a larger deposit from people is certainly a factor. That is the banks stopping throwing money indiscriminately at people, not stopping lending.

Having a 10-20% deposit was par for the course up until very recently. What went on towards the end of the bubble was the aberration in lending practices, not the norm.

In real terms it’s back even further.

In income adjusted terms, the average rental price related to the average income - it’s got to be way back to the mid-1990’s.

This is the one good outcome of the boom - renters now face reduced housing costs for better quality dwellings, all subsidised by 40-something investors (and ultimately, bank shareholders).

It’s the inter-generational wealth transfer - beloved of McWilliams et al - is operating in reverse.

ha, so rent is back below 2002 levels. Looks like it could be considerably lower this time next year.

I need one of these people to argue with.
‘Rent goes up every year and a mortgage doesn’t’