Daft.ie report shows supply of rental properties rose 50% last year

THE supply of rental properties in Ireland surged by almost 50% in the last three months of last year.

Also landlords are commanding up to €1,258 a month for a one-bed property in Dublin compared with €524 in areas like Sligo and Donegal.

The daft.ie rental report found the dramatic hike in supply is likely due to those who had invested in property but had not sought a rental income until recently.

Senior economist with the Economist Intelligence Unit Dan O’Brien said: “As interest rates rose, so did debt servicing costs, while at the same time capital gain evaporated as prices stopped rising. The likely result — those who had been willing to forego rental yield are less willing to do so.”

Mr O’Brien said it is too early to tell whether nervousness internationally will cause a further deterioration in sentiment in Ireland.

“It is certainly to be hoped that it will not, because there is considerable downside risk for the Irish economy currently, with most of it related to the property market.

“Although demand for rental properties is likely to have expanded, it will not have matched the doubling in supply. The inevitable result is to be seen in rents: the strong increases in the past couple of years are slowing sharply,” he said.

The report found the stock of properties for rent on Daft increased 90% between January 1 last year and January 1 this year — with half of that occurring in the final three months.

Rents have stopped increasing for the first time since they started to rise in mid-2004, according to daft.ie’s Ronan Lyons.

“The fact rents have risen steadily since then shows the strong connection between the rental market and immigration. Overall demand remains strong, particularly in urban areas. We do not foresee any major weaknesses while immigration remains at current levels,” he said.