Rents down 27% from 2007 peak

RENTS fell by just over half a percent last year compared with a drop of 15% during 2009, a new report from property website Daft has shown.

The average rent nationwide now stands at €830 — a staggering 27% below the 2007 peak.

The levelling off in rents nationally hides different regional trends, however. In Dublin, rents in some areas are up to 2% higher than a year previously. In Cork and Galway, rents were largely unchanged, while in Waterford and Limerick cities rents fell by between 3% and 4% over the course of 2010.

Outside the main cities, rents continued to decline, falling an average of 3.5% over the year. The total number of properties available to rent nationwide has fallen from a high of more than 23,000 in mid-2009 to less than 16,000 at the start of February.

Commenting on the report, independent economic researcher Lorcan Roche Kelly said the figures will come as “no small relief” to landlords.

Mr Roche Kelly said that after six turbulent years, the rental market may be returning to an even keel.

“The first thing that jumps out is that the market in Dublin seems to be a little ahead of the market elsewhere, with rents in the capital showing minimal moves during 2010.

“In the rest of the country the rental pressure is all to the downside, but not to an extent that should prove worrying at the moment. The smaller price moves in Dublin are probably due to the size of that market, and the rate at which it can clear, compared to the rest of the country.”

Looking at the fall in the number of properties available for rent, Mr Roche Kelly said there is a chance this might be an indicator of something more fundamental happening in the rental market.

“Economists have long tried to explain the exceptionally high level of property ownership in Ireland through an historical lens without, for the most part, offering a situation where this cycle might be broken,” he said.

“There is a chance — and this would need decades rather than years worth of data to prove — that the average Irish person may have fallen out of love with home ownership.”

Ronan Lyons, economist at Daft.ie, said, however, across large parts of the country there remains a significant oversupply on the market, which is pushing down rents. “All eyes will be on rents in Dublin during 2011, as stable rents could indicate a stabilisation in the labour market and broader economy,” he said.