Dublin - Significant reduction in rents coming?

Ozark707

KennisWhale wrote: »

For the rest of the academic year it seems which means not until September 2021.

I wonder what the prices will be for tourists and renters - the price of a student room in a Uninest place in Dublin https://www.daft.ie/ireland/residential-property-for-rent/?s%5Bagent_id%5D=11882&s%5Bp%5D=qptpwptr seems to be 1000-1100 per month. I'm not sure who that would be aimed at as the professional workers could afford to share in a nice 2/3 bed for around that and the part-time working, English language student definitely couldn't afford that.

It will have to be cheaper than what it would be to rent a room in a 2 bed I would have thought. Seeing as there are now nice 2 beds coming on stream for less than 2k I think they might have to pitch these in the 700-800 range?

KennisWhale

Ozark707 wrote: »

It will have to be cheaper than what it would be to rent a room in a 2 bed I would have thought. Seeing as there are now nice 2 beds coming on stream for less than 2k I think they might have to pitch these in the 700-800 range?

You would think so but look at the new build / newly renovated places owned by funds. They don't want the rent to go below a certain level despite having huge numbers of vacancies (Kennedy Wilson, Greystar etc.) so are not reducing the rent. If these student accommodations offered 700/800 for tourists and renters, will they be tied to these for the new academic year?

rightmove

surely there is a huge reduction in tourists so that part of the argument is not major. However if I had purchased a 1 or 2 bed apt close to where these are i would probably feel somewhat aggrieved since this is a blindsided way to devalue my property.

nerrad01

KennisWhale wrote: »

You would think so but look at the new build / newly renovated places owned by funds. They don't want the rent to go below a certain level despite having huge numbers of vacancies (Kennedy Wilson, Greystar etc.) so are not reducing the rent. If these student accommodations offered 700/800 for tourists and renters, will they be tied to these for the new academic year?

Imagine the absolutely crazy idea of making these pension funds/ reit`s pay tax on vacant properties that they are using to basically manipulate and price fix the rental market. What an absolutely great time to try correct the rental market, that the government will no doubt squander.

Also major kickback from the hotel federation as these student properties will directly impact them

KennisWhale

rightmove wrote: »

surely there is a huge reduction in tourists so that part of the argument is not major. However if I had purchased a 1 or 2 bed apt close to where these are i would probably feel somewhat aggrieved since this is a blindsided way to devalue my property.

If you had a 1 or 2 bed close to these apartments, you probably had your mortgage covered and then some with the rents being achieved the last few years. A year or five where rent is below the cost of the mortgage is hardly a big deal in the lifetime of the investment.

Although, to be honest you'd find it hard to get any traction politically by complaining about having to reduce your rent as a landlord.

Lux23

KennisWhale wrote: »

In a housing crisis, this should be good news as it increases supply in the short-term. So I wonder what the actual basis for objections could be - if people don't like them they don't need to rent them.

.

I suppose the objection is that it isn't ideal to share a kitchen with lots of other people in normal times nevermind during a pandemic. I guess you don't have to worry about that, do you?

KennisWhale

nerrad01 wrote: »

Imagine the absolutely crazy idea of making these pension funds/ reit`s pay tax on vacant properties that they are using to basically manipulate and price fix the rental market. What an absolutely great time to try correct the rental market, that the government will no doubt squander.

Also major kickback from the hotel federation as these student properties will directly impact them

Absolutely, talk about kicking the industry in the mouth. The article has a quote from the industry representative group at the bottom of it pointing out the negative effect on them for allowing tourists into these student accommodations.

From looking on Booking.com for a room Friday 4th December in Dublin, it's pretty clear that no tourists or people in general have booked in to hotels. Airbnb has 300 places (rooms and full places) available that night.

Ozark707

KennisWhale wrote: »

Absolutely, talk about kicking the industry in the mouth. The article has a quote from the industry representative group at the bottom of it pointing out the negative effect on them for allowing tourists into these student accommodations.

From looking on Booking.com for a room Friday 4th December in Dublin, it's pretty clear that no tourists or people in general have booked in to hotels. Airbnb has 300 places (rooms and full places) available that night.

Only 300? Seems low

KennisWhale

Ozark707 wrote: »

Only 300? Seems low

It said "300+" but when I scrolled to the last page I only counted 300.

Ozark707

KennisWhale wrote: »

It said "300+" but when I scrolled to the last page I only counted 300.

Will be interesting to see the impact this has on the existing STL market.

KennisWhale

https://www.wsj.com/articles/struggling-rental-market-could-usher-in-next-american-housing-crisis-11603791000?mod=djemwhatsnews

Struggling Rental Market Could Usher in Next American Housing Crisis

I'm not a subscriber but it is discussed here https://www.zerohedge.com/personal-finance/crashing-rental-market-could-set-next-housing-crisis

Eerily similar to the Irish rental market crash that is happening, even though it relates to the US. It is unsurprising that this would be the case given the alignment of our economy with the US economy (note; 2008 housing market crash and also the recent years of having Irish GDP booming above Euro area average in line with success of Big Tech and US stock market).

how bad will the eviction scene be when the protections against eviction put into place by federal and local government expire? It is estimated that such moratoriums may wear off by January 2021, or even sooner. At that point, renters will need to pay up for the months they've missed.

Though the $70 billion of rental arrears pales in comparison to the $1.3 trillion that set off the subprime mortgage crisis, the 12.8 million Americans affected far surpasses the 3.8 million people who were foreclosed on during the housing crisis. At the same time, housing prices are actually rising as a wave of owners move from the city to the suburbs.

The debt could be enough to stifle a recovery coming out of the pandemic, the WSJ notes. Mark Zandi, Moody’s chief economist, said: “These households will have to make some pretty massive financial choices and pull back on other spending to pay their rent. That’s a hit to the economy.”

KennisWhale

Lux23 wrote: »

I suppose the objection is that it isn't ideal to share a kitchen with lots of other people in normal times nevermind during a pandemic. I guess you don't have to worry about that, do you?

Yeah, it's so much better to share a bedroom with a stranger. Not sure what your point is here.

Ozark707

Report in IT today showing the impact on 1-beds since the pandemic began.

Couples, it seems, are shunning the confines of a one-bed apartment as they struggle to both work and live in two rooms. According to the report, one beds are now proving difficult to let in the capital, with tenants looking for more space by renting a house. Even love doesn’t trump being able to shut a door on all those incessant conference calls.

...

In the overheated rental market of days gone by, expressing a preference only got tenants so far; these days however, the market is turning in their favour, and a dislike for one-beds could prove problematic down the line for developers.

With the Airbnb short-term tourism market stalled for the foreseeable future, more properties are now available. And, as noted in the report, void periods, or times when the property is empty and not generating any rent, have trebled since March.

Unsurprisingly this lack of demand means that rents covered in the report have also slid, with those on apartments falling by about 12 per cent, according to Reilly’s figures, since the advent of the pandemic in March.

https://www.irishtimes.com/business/work/developers-may-need-to-go-back-to-the-drawing-board-as-one-beds-fall-from-favour-1.4395657

KennisWhale

Just saw it and was about to post.

It actually says that one beds are proving "difficult to let". That's quite a statement as it indicates something happening now as opposed to something which may happen. I would have typically expected an IT article to talk about the potential lack of demand for one beds in the future but never to actually include a statement that they are already difficult to let - a statement from an agent as well!

Unsurprisingly this lack of demand means that rents covered in the report have also slid, with those on apartments falling by about 12 per cent, according to Reilly’s figures, since the advent of the pandemic in March.

This is broadly in line with that Dublin Daft rental tracker posted from time to time (specifically though it is 14-18% drops for one and two bed apartments in Dublin since 15 March). Finally, some respite for renters. Importantly, a chance for supply to get some traction while demand is frozen.

Ozark707

KennisWhale wrote: »

Just saw it and was about to post.

It actually says that one beds are proving "difficult to let". That's quite a statement as it indicates something happening now as opposed to something which may happen. I would have typically expected an IT article to talk about the potential lack of demand for one beds in the future but never to actually include a statement that they are already difficult to let - a statement from an agent as well!



This is broadly in line with that Dublin Daft rental tracker posted from time to time (specifically though it is 14-18% drops for one and two bed apartments in Dublin since 15 March). Finally, some respite for renters. Importantly, a chance for supply to get some traction while demand is frozen.

Yes was surprising to see the IT carry this piece. Maybe the agent wants the landlords to drop their expectations as there still is lots of demand out there, just not at the ridiculous levels many places are still on at.

Maybe they didn't want to highlight that the 2-bed apt market has also taken a massive hammering. Next stats should be out tomorrow. Will be interesting to see if the downward trend is still happening. It is looking now that 2 beds in D4 are dropping below 2k now...

https://thepropertypin.com/c/the-irish-property-bubble/rental-price-drops

KennisWhale

We have a fixed term lease due to run until end of February (last rent payment end of January). I really like the place, area and the landlord is lovely as well but I have started to look around and email some places. We're in a 2 bed apartment for 2000 so are looking for a 2 bed house for less than 2000. Otherwise we won't bother as we plan to buy in the next 12-15 months. In the enquiries I have made for places 2k or more, I have asked if they would consider a lower rent than what we currently pay and the responses are promising, subject to the places still being available of course.

Ozark707

KennisWhale wrote: »

We have a fixed term lease due to run until end of February (last rent payment end of January). I really like the place, area and the landlord is lovely as well but I have started to look around and email some places. We're in a 2 bed apartment for 2000 so are looking for a 2 bed house for less than 2000. Otherwise we won't bother as we plan to buy in the next 12-15 months. In the enquiries I have made for places 2k or more, I have asked if they would consider a lower rent than what we currently pay and the responses are promising, subject to the places still being available of course.

Yes I would bargain hard and I am sure someone will bite. I would expect rents to be even cheaper in the new year. Are you able to indicate what % those LL's are willing to accept under the existing asking price?

Hubertj

KennisWhale wrote: »

Just saw it and was about to post.

It actually says that one beds are proving "difficult to let". That's quite a statement as it indicates something happening now as opposed to something which may happen. I would have typically expected an IT article to talk about the potential lack of demand for one beds in the future but never to actually include a statement that they are already difficult to let - a statement from an agent as well!



This is broadly in line with that Dublin Daft rental tracker posted from time to time (specifically though it is 14-18% drops for one and two bed apartments in Dublin since 15 March). Finally, some respite for renters. Importantly, a chance for supply to get some traction while demand is frozen.

I think what is also important here is that landlords with poor quality units will need to invest / modernise to attract tenants. With more choice, some tenants may be happy to pay the same or slightly more for a higher quality apartment.
Some of the articles in media over later couple of years about sub standard accommodation were terrible.

Ozark707

Hubertj wrote: »

I think what is also important here is that landlords with poor quality units will need to invest / modernise to attract tenants. With more choice, some tenants may be happy to pay the same or slightly more for a higher quality apartment.
Some of the articles in media over later couple of years about sub standard accommodation were terrible.

I can see tenants moving to better quality places and probably will be able to secure them at better prices than what they are currently paying. I would treat the asking prices on daft as aspirational and Kennis has indicated it seems like LL's are not accepting the new reality.

Hubertj

Ozark707 wrote: »

I can see tenants moving to better quality places and probably will be able to secure them at better prices than what they are currently paying. I would treat the asking prices on daft as aspirational and Kennis has indicated it seems like LL's are not accepting the new reality.

Yep. Or pay slightly more for a 2 bed instead of a 1 bed. You could be paying €1700 for a 1 bed now but could move to a 2 bed for €1900.... with more choice it makes for a functioning market which doesn’t seem to have been the case for the last few years. Colleagues in work who relocated to Ireland from elsewhere had difficulty securing good apartments. Not exactly a good introduction to Ireland. Increased availability will also benefit immigrants and returning emigrants. Visas are being processed very slowly and the likes of AWS, google, MS and other are hiring again.

Smouse156

Ozark707 wrote: »

I can see tenants moving to better quality places and probably will be able to secure them at better prices than what they are currently paying. I would treat the asking prices on daft as aspirational and Kennis has indicated it seems like LL's are not accepting the new reality.

Wait I thought the new reality was leave it empty till the 2019 price + 4% comes??? Sure if I drop the rent now I can’t keep increasing it at 4% annually forever??? Oh wait...

Ozark707

Hubertj wrote: »

Yep. Or pay slightly more for a 2 bed instead of a 1 bed. You could be paying €1700 for a 1 bed now but could move to a 2 bed for €1900.... with more choice it makes for a functioning market which doesn’t seem to have been the case for the last few years.

Yes and should continue to be better value out there now that it looks like student places are going to be doing on the open market (with the student market being dead) this is just going to lead to lots more supply out there. If only they could tackle the empty REITs then it truly would be a functioning market.

Ozark707

November figures are in. Shows continued declines in asking prices.

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/

Eric Cartman

Ozark707 wrote: »

November figures are in. Shows continued declines in asking prices.

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/

the 1 bed apartment rates make a whole lot of sense, so many people renting them who only needed to be in a city 5 days a week for work who are now working entirely from home.

agoodpunt

rental market demand will not return till the students and air travel is back.
LLs with borrowings will need to continue letting, others will wait it out till demand returns then back on the market in sept 2021/22 trashing, rent arrears and stuck in below market are risks worth avoiding.
Loss of rent cushioned with reduced tax returns on that rental income.
Vacine needed to return to normal life

brisan

agoodpunt wrote: »

rental market demand will not return till the students and air travel is back.
LLs with borrowings will need to continue letting, others will wait it out till demand returns then back on the market in sept 2021/22 trashing, rent arrears and stuck in below market are risks worth avoiding.
Loss of rent cushioned with reduced tax returns on that rental income.
Vacine needed to return to normal life[/QUOTE]

I would have said the same
However with only a 50% efficacy it will be a long time to return to normal.
If you vaccinate 100 people only 50 will be immune and you have no idea which 50,so you have to treat them all as potential covid carriers
Not what I assumed a vaccine would be

AssetBacked2

Daft have finally published a rental report, the first one since Q1 2020 and a beastly 27 pages it is too daft. ie/report (copy the link and close the space)

Unfortunately, the report is basically unreadable and offers no insight on the effect of Q3 on the market, in Dublin I mean. It is actually an appalling effort at giving an indication of the effect on the market of the lockdown era.

It claims to be a Q3 rental report but;

(1) There was no Q2 Daft rental report at all. The last one was based on Q1 2020 so they have ignored reporting for April to June. Useless.

(2) The Q3 rental report did not provide a breakdown within the Q3 period. Instead it posts average rents broken down and then compares them to a year previously. Why not compare to Q2? Since they didn't report on Q2 then why not compare to Q1 data? The result, the drops look small in Dublin (less than 5% to slight increases when compared YoY!).

Alternative Source

This is the link that gets posted around here which is updated as of the 1st of each month, using the advertised rentals for Dublin (average prices, median prices and total number of listings). It provides a far more useful insight into the actual state of affairs, which are that covid and lockdowns have caused something not far short of a crash (15-20% drops in rents for 1 and 2 bed apartments in Dublin in an 8 month period).

bl.ocks. org/pinsterdev/raw/234b4a5310a14a32e080/ (copy the link and close the space)

It is just so disingenuous from Daft, bordering on underhand, to report on the rental market the way they have done (see (1) and (2) above), I'm so disappointed with them.

Look at the IT article on the report irishtimes. com/business/economy/covid-19-crisis-keeps-rents-in-dublin-stable-1.4403762;

Rents rose 1.2 per cent nationally in the third quarter but were stable in Dublin due to an increase in availability of properties arising from the Covid crisis

That isn't true at all, they were stable YoY but not in Q3!

Smouse156

AssetBacked2 wrote: »

Daft have finally published a rental report, the first one since Q1 2020 and a beastly 27 pages it is too daft. ie/report (copy the link and close the space)

Unfortunately, the report is basically unreadable and offers no insight on the effect of Q3 on the market, in Dublin I mean. It is actually an appalling effort at giving an indication of the effect on the market of the lockdown era.

It claims to be a Q3 rental report but;

(1) There was no Q2 Daft rental report at all. The last one was based on Q1 2020 so they have ignored reporting for April to June. Useless.

(2) The Q3 rental report did not provide a breakdown within the Q3 period. Instead it posts average rents broken down and then compares them to a year previously. Why not compare to Q2? Since they didn't report on Q2 then why not compare to Q1 data? The result, the drops look small in Dublin (less than 5% to slight increases when compared YoY!).

Alternative Source

This is the link that gets posted around here which is updated as of the 1st of each month, using the advertised rentals for Dublin (average prices, median prices and total number of listings). It provides a far more useful insight into the actual state of affairs, which are that covid and lockdowns have caused something not far short of a crash (15-20% drops in rents for 1 and 2 bed apartments in Dublin in an 8 month period).

bl.ocks. org/pinsterdev/raw/234b4a5310a14a32e080/ (copy the link and close the space)

It is just so disingenuous from Daft, bordering on underhand, to report on the rental market the way they have done (see (1) and (2) above), I'm so disappointed with them.

Look at the IT article on the report irishtimes. com/business/economy/covid-19-crisis-keeps-rents-in-dublin-stable-1.4403762;



That isn't true at all, they were stable YoY but not in Q3!

Daft nowadays is about as useful as Pat Davitt! Complete nonsense and pumping a heavily strained market

AssetBacked2

Smouse156 wrote: »

Daft nowadays is about as useful as Pat Davitt! Complete nonsense and pumping a heavily strained market

I'm actually shocked at the reporting. I suspected they were trying to rejig the reporting in order to portray the data the way they have but when we have the actual data separately to compare against, they have been caught with their banana hammocks around their knees while the tide has gone out. Even if they haven't tried to fudge the data, I'm disappointed they paint it as a Q3 report but actually do not offer much insight as to the quarter when compared against the previous quarter.

Smouse156

AssetBacked2 wrote: »

I'm actually shocked at the reporting. I suspected they were trying to rejig the reporting in order to portray the data the way they have but when we have the actual data separately to compare against, they have been caught with their banana hammocks around their knees while the tide has gone out. Even if they haven't tried to fudge the data, I'm disappointed they paint it as a Q3 report but actually do not offer much insight as to the quarter when compared against the previous quarter.

All it’s doing is giving landlords false hope that the 2019 price is achievable when it clearly isn’t! Those vacant units are just going to stay vacant for month and months to come