Rent costs still falling but at a slower rate

THE cost of renting residential property continues to drop but the rate at which prices are falling is the slowest in two years, according to the latest market analysis.

A report published yesterday by property website daft.ie found the typical rent nationwide is €835, down from €900 in July last year. The report found the average rent during the second quarter of 2010 was almost one percentage point lower than the first quarter when rents were largely static, falling by just 0.4%.

The good news for tenants is that rents are almost 27% cheaper than peak price levels, while landlords can take comfort from the knowledge that the number of rental units on the market has begun to drop off.

July ended five months of rising stock on the market. The number of rental properties as of August 1 stood at 20,000 units compared with about 24,000 this time last year, although the stock of properties available to rent in the capital has risen 5% since January. Likewise, in Cork, Limerick and Waterford cities, there has been a significant increase in the number of properties available to rent.

In most parts of the four cities, rent-a-room income is falling, typically by more than 5% a year.

However, overall rents in Galway and Limerick rose slightly in the second quarter, although in Cork and Waterford, where they had been static in the early part of the year, rents recorded a 1.6% and 2.8% drop respectively.

In Dublin, Dún Laoghaire was the most expensive place to rent a one-bed apartment at €939 a month, or €1,121 for a two-bed, followed by D4. Dublin 7, taking in part of Ballymun and Donnycarney, had the cheapest one-beds on offer in Dublin post code areas for the second quarter, at €721. However, rents in the more central city areas fell by between 1% and 2%.

In Munster, the average rent for the second quarter was €654, down 7.1% on last year, 1.1% on the first quarter of 2010 and almost 25% since peak levels.

Daft.ie economist Ronan Lyons said: “The year-on-year fall in rents is at its slowest pace in two years, suggesting that the rental market may be close to stabilising. Nonetheless, the total stock of properties available to rent remains high, which means we are unlikely to see rents rising rapidly in the near future.”