Rents in capital up 2.8% as supply falls
While average monthly home rents in Dublin now stand at €1,080, up more than 2%, the average rent nationwide is now €820 a month, — 0.8% higher than a year ago.
Ronan Lyons, economist at daft.ie, said the report showed continued falls in the available number of rental properties nationwide, but most significantly in Dublin.
“There are now fewer properties on the market than at any point since early 2007. After close to two years of static prices in the capital, this change in supply appears to be impacting rents in Dublin, which have risen just ahead of inflation over the last two years.”
Galway experienced a 2.2% rise over the past 12 months. Cork remained largely stable (-0.4%) while Limerick and Waterford experienced 2.2% and 4% falls respectively. Rents outside the main cities rose 1% in the third quarter of 2012 but remain 1.5% lower than a year previously.
“The market is now more balanced than it has been for the past decade,” said Mr Lyons. “However, there is a significant difference between shortages of properties in Dublin and Cork and what is happening in smaller towns where there remains a significant over-supply of homes.”
He said that, given shortages in main urban centres, the question now was whether our national planning system would be able to cope with the next wave of development.
“Shortages are already emerging, particularly in Dublin, so we need to start building. Nama should also start getting ready to get rid of some of its Dublin stock because there is definitely a growing demand for more homes in the city and they are sitting on some valuable commodities.
“We have already seen an influx of investors from the US, Canada, and the Continent looking at the market in Dublin and ready to buy because there are good rental yields to be had.”
On a broader note, he said stabilisation of jobs figures, particularly in Dublin and Cork, was also helping to steady the property market.
However, banks still appeared reluctant to offer mortgages to certain sectors. “The banks seem to be targeting a particular segment of the market — those in secure employment — and they will argue that for every 100 mortgages they approve only 40 or so are actually taken up.
“It’s a bit of a chicken- and-egg situation. Potential buyers have been reluctant to move while prices and rental yields were falling, but now that both are rising again, that situation should change.”
Lorcan Sirr, lecturer in housing at Dublin Institute of Technology, said: “The numbers of individuals and families renting has rocketed in the last five years. Across Ireland, about 29% of all people now rent, with 18.5% renting from the private sector. This is roughly the same level as in the mid-1950s. But what is more interesting is the speed of change: Numbers renting in the private sector have increased by 86% since 2006.”
Year-on-year change in home rents:
Dublin €1,017, up 2.8%
Cork €867, down 0.4%
Galway €791, up 2.2%
Limerick €680, down 2.2%
Waterford €624, down 4.0%
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