Shortage of new homes sees rise in residential rent rates

A shortage of new homes in Dublin and Cork has seen a surge in residential rents since January, the biggest in five years.

2013 got off to a strong start for Ireland’s residential lettings market, particularly in Dublin, according to property consultants Savills Ireland.

With unprecedented demand for rental property, Savills say rents have started to increase in many areas and this pace looks set to continue.

Rents in most parts of Dublin are now between 2-4%higher than they were a year ago with some developments seeing increases of up to 8% year on year. Savills Cork report a similar trend with rents up 5% in the greater Cork area.

The Savills report mirrors the results of a new monitor of housing market activity, published yesterday by the Irish Banking Federation.

Really surprised at how expensive Dublin is! Honestly don't know howanyone can buy or rent property here

— HARVEY (@harveygmr) February 20, 2013

Drawing on published data and compiled in collaboration with Ronan Lyons, economist with Daft.ie, the IBF Housing Market Monitor brings together statistics on prices, transaction levels and mortgage draw-downs. The IBF, which intends to publish the monitor on a quarterly basis, warned yesterday of the danger of a housing shortage emerging.

However, according to Clarie Neary of Savills Ireland, rental inflation is likely to result in more buyers emerging: “Landlords have added up to 8% on rents on some schemes and we’ve had no difficulty in renting them out.

“Rental inflation should ultimately persuade more people to make the decision to buy and this is a trend that we see happening during 2013 and 2014”.

Figures from Daft.ie show clearly the growth of Ireland’s rental market over the last few years — in Dublin 2012 there was 4,200 rental properties on the market.On Nov 1 last, there were just 2,200 properties available in Dublin to rent. The number of properties available to rent outside the main cities on November 1 was just under 9,800, compared to 11,200 a year previously.

Catherine McAuliffe, director of Savills Ireland Cork branch said that popular areas such as the city centre and Douglas have experienced substantial increases in rental activity over recent months, particularly for new apartments.

“We put a complex on the market just last week and we had approximately 30 viewings within the first two days of marketing,” she said.