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DOMESTIC RENTAL PRICES levelled off in the second quarter of 2011, according to the latest quarterly report published by Daft.ie this morning.
The report, which deals with the months between April and June, showed that rental prices in Dublin and Galway had stayed broadly static in the last year, though they had fallen in Waterford and Limerick – by around 2 per cent in each case – and risen by 4.7 per cent in Cork.
The average two-bedroom dwelling will now cost €1,107 per month in Dublin city centre, compared to €837 in the centre of Galway and €785 in the centre of Cork.
The same accommodation would cost €573 per month in Limerick, and €551 in Waterford.
Daft.ie’s data showed that the average rental price had now fallen by a little over 25 per cent from its 2007 average. Rental prices hit a peak in February 2008, shortly before the collapse in the property market.
Economist Ronan Lyons said recent reports demonstrated how there was a “strong relationship between the number of properties available on the market, and trends in rents.
“The total number of properties available to rent at any one time in Ireland’s five major cities rose from 6,000 on May 1st to 8,000 at the start of August,” he commented.
The report will make particularly interesting reading for outgoing Leaving Cert students hoping to attend a third-level institution away from home next month.
It found that rental prices for rooms near many colleges had fallen in the last year, with students enrolling in Trinity, DIT, GMIT, Waterford IT, Sligo IT and NUI Galway all benefiting from lower asking prices than at this time last year.
Students enrolling in the University of Limerick (up by 8.7 per cent) and IT Letterkenny (up by 7.3 per cent) will fare less well, however.
UCD Students’ Union welfare officer Rachel Breslin said the increase in rental prices was ‘almost ironic’ given how students would now have to live farther away from their colleges in order to qualify for the highest rate of college grants.
The most recent Daft.ie sales report showed that the average asking price for a house had fallen under €200,000 – having lost over half of its value since the peak in the property market.
Daft.ie is part of the Distilled Media group.Journal Media Ltd has shareholders – Brian and Eamonn Fallon – in common with Distilled Media Group.
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I still can’t bring myself to trust the likes of Daft.ie telling me what is happening in the market without feeling it’s self serving and wholly inaccurate as no actual purchase price/rental charge is published, only the asking price.
e.g. How are ”rents stabilising in many areas" when there are allegedly 2000 more properties on the market and emigration/repatriation is on the rise, and unemployment so high? And not to mention thousand of units to come on stream next year as NAMA have funded supposedly viable ‘near completions’.
It’s more bs to reassure that the market is bottoming out and entice people back to the auctioneers window for that ‘supposed’ great value!
Only last week BoI and BoSI saw 7-10% further fall in residential prices predicted into early 2012. Hold onto your money for another few months!
Hi RP,
I understand the value of being sceptical but I’m curious as to why you think the Daft.ie Report would start to “massage” the figures now, after seven years of telling people whether rents or asking prices are going up or down. (In particular, Daft.ie came under a lot of fire in 2006 for pointing to a slowing property market and again in 2007 when the report found that prices were falling!)
All the report does is outline what is happening on the prices on the website, which is probably about 90% of both the sales and lettings markets. Given that this is a question of 10,000s of observations each quarter, there are large enough sample sizes to build up a reliable index of both rents and asking prices.
What you are talking about is what might happen rents (and prices) in the future and once we start talking about that, it’s all one person’s opinion versus another. For the record, I do think over-supply is a massive factor for the property market, but one that is often overstated in relation to the five main cities. If you look at the Dept of Environment figures on completions and on ghost estates, there is proportionately a very small overhang in each of the cities, compared the rest of the country and in particular the Upper Shannon region.
They are right on this. If anything rents are now higher (in Dublin at least). I am in the situation where I am looking to rent at the moment and also was this time last year. It’s very competitive and rents are not linked to the deteriorating property values but to supply and demand, and high mortgages. There is evidence that NAMA is keeping properties off the Market to maintain high rental prices.
Cork rental prices have risen if anything
@Brian
You’ve got your finger on the pulse! Cork rents are up 5% year on year: http://www.daft.ie/report/rachel-breslin
@Ronan – in all fairness the Daft report, though excellent and transparent, is a report on ASKING prices, be it rental or purchase. The problem in the Irish property market is that for the private renter or purchaser it is a given that asking prices can (and are) haggled down. Anecdotal evidence seems to suggest that the few people who are buying houses/apartments are putting in offers of up to 30% below the asking price and in many cases sellers are accepting low ball offers for fear of not being able to sell at all further down the line.
Then we also have a phenomen where sellers are inflating their prices by 20-30% because they expect buyers to throw in low offers in a falling market, again this brings more distortion to the ‘real’ value of a property via the asking price data.
In order for any market to work perfectly there must be price transparency, i.e. all participants should have access to previous sales prices so they can gauge value. The powers that be have been talking about a National Price Database for well over a year now but still it has not surfaced. It now appears that Phil Hogan, the Minister in charge of this, is dragging his feet because price transparancy does not suit the propertied classes of the Fine Gael party- they don’t want the first time buyer to know how low this market really is- vested interests at play once again. The more things change the more they stay the same…..
@Ronan- love the blog- if you ever find the time to scribe a cross comparison study on international property crashes and the percentage they tend to overshoot the market on the way down I’d be really interested to read it. Keep up the good work.
Daft is a vested interest and a serial offender when it comes to reports like these. The only way you can reach the conclusion that rents are static or rising is by willfully ignoring the most important factor in the equation, reality. From the criminal activity at NAMA which uses taxpayer money to distort the property market or Fine Gael reneging on its election promise of reversing the upward only rent review and also the net migration and collapsing private sector it can only be assumed that daft are complicit in the immoral act of trying to resuscitate a victim that’s been dead for 5 years for their own gain . Daft the ESRI and the CSO all publish reports based on the here-say of Auctioneers who don’t provide any factual evidence. Instead these reports get published and the mainstream media uses it to bolster it’s good news and everything is going to be ok message. How many times have we seen the headline “Property Prices Fall” when in fact it should read “Property Asking Prices Fall”, there is a fundamental difference. You only need to look at the bi-weekly rental reports at http://www.collapso.net to see how daft the daft reports really are.
But the point remains, Marcus, that if Daft is so wilfully out to game the market, why has it published so many reports over the past seven years saying rents or asking prices are falling? We’re not very good at this manipulation thing if that’s we’re about! Reporting that asking prices were falling in late 2006/early 2007 certainly wasn’t very smart if Daft is just a vested interest just out to make a fast buck…
At the end of the day, I find it telling that people who complain when the Daft Report finds that rents or asking prices are not falling are notably silent when it finds that they are.
Shouldn’t the Journal remain independent and not a Daft.ie promotion site.
Ronan what do you find tellling? please expand?
Cathal – TheJournal.ie isn’t trying to promote Daft in doing this story, it’s merely citing its research. The same survey has appeared on plenty of other news sites today (exhibits A, B and C to give but three examples), and the disclosure at the very end of the piece is intended to outline that while the two sites have common ownership, they’re still operated independently.
if its independent why do we have Daft or Distilled Media Group employee making comments and furthermore arguing with other peoples comments and saying their comments or lack of are telling.
i have not made any comment either way on the validity of the Daft asking prices report. i have no reason to question it.
Cathal – I can’t speak for why Ronan is commenting here but I suspect he’s just standing up for his own work, involved as he is in compiling the report.
Irrespective of that, a Daft/Distilled employee is surely as entitled to comment on a public forum as anyone else is?
Comments perhaps but not criticizing people who disagree with the Daft Report. Also Ronan is introduced as Economist Ronan Lyons and there is no reference in this article that he is a Daft/Distilled employee.
If you want to see the sheer amount of property NAMA is sitting on then check out http://www.irishdistressedassets.com . Completely agree with the earlier comments about asking versus actual pricing.
Any indication of how this compares with rising rents prior to 2007? We talk about purchase prices of houses now being at 2006 or 2004 levels. Is there a similar comparison for rents?
What I’m interested in finding out is whether rents have fallen back as far as purchase prices have and if not, is this because of state rental supplements.
While rents in Dublin maybe static, in Real terms they are at or above the peak level when adjustments for income are taken into account
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