Number of empty houses falls 50%

EMPTY houses in Dublin have halved over the last 18 months as owners push to rent their properties.

This news comes as reports say that in Cork rental demand is “particularly strong” with Savills saying there is close to full occupancy in the city centre.

Savills tracks the number of empty houses and apartments in each new development and has noted a very significant drop in figures in Dublin since March 2010.

Unoccupied houses in Dublin have fallen from 11,000 in March 2010 to 5,400 in the past 18 months.

Director of residential at Savills, Ronan O’Driscoll said the fall can be explained by the fact that during the last 18 months, developers, banks and receivers have undertaken to rent out the vast majority of the properties and the balance have been sold.

“Rental values in Dublin are now stable and demand for rental stock remains very strong throughout Dublin, with demand exceeding supply in many locations,” said Mr O’Driscoll.

He said there is a belief among the public that purchase prices for apartments will continue to fall and also there is a “severe slowdown” in flow of new mortgages.

Savills said that while sales have virtually dried up in the new homes market, the rental market is thriving with very strong demand for houses and apartments.

Also they said developers have chosen to fit-out and rent large numbers of apartments and houses in new developments.

“Whilst apartment prices are down 60%, rental values are only down 20% from peak values. Demand for rental stock remains robust throughout Dublin with demand exceeding supply in many locations,” said Mr O’Driscoll.

“Looking more closely at the overhang, there are currently just over 700 new houses built and unsold, and 4,600 apartments. The pattern of new units being rented is likely to continue for the next year as the prices available for new homes are well below construction cost,” he said.

Savills predict the pattern of volume rental in these developments will continue in the absence of a serious recovery in values.

Meanwhile, director of residential at Savills in Cork, Catherine McAuliffe said potential purchasers are renting rather than buying at the moment: “With price decreases of up to 60% now evident in the market, investors contemplating the residential rental market will take comfort in the knowledge that demand is strong and rental levels have stabilised.”

She said many of the vacant stock in Cork is being fitted out and rented, particularly apartment schemes.

“Rents are strong in Cork city with prime city centre two bed apartments achieving €1,150 per month, while average two beds close to the city are likely to be in the region of €850 per month,” said Ms McAuliffe.