Dublin - Significant reduction in rents coming?

cgcsb

Ozark707 wrote: »

Yes and one only has to have a quick look at daft now and you will see FAR better value out there if you were comparing against anything in the last few years. The market adapts pretty quickly (unless you are a REIT of course but they seem content to let properties vacant forever).

I was speaking to someone recently who relocated here at the end of the summer and was complaining about the rent they had to pay (2.1k for a 2 bed in D4)...when I told him he would have been paying probably 2.5k pre Covid he cheered up.

Whatever about 2 beds in D4 as long as manky suburban apartments loose their 2k a month notions then I think we'll be laughing. In a healthy market Santry should be a lot more than 10% cheaper than D4.

AssetBacked2

We still have an eviction ban in place, which will free up more properties once it expires in the New Year.

brisan

https://www.independent.ie/business/commercial-property/irelands-biggest-private-landlord-sells-151-apartments-for-48m-39732973.html
Irelands biggest landlord sells 150 apartments for 48m
Roughly 320k each.

Ozark707

brisan wrote: »

https://www.independent.ie/business/commercial-property/irelands-biggest-private-landlord-sells-151-apartments-for-48m-39732973.html
Irelands biggest landlord sells 150 apartments for 48m
Roughly 320k each.

While not knowing the exact spread amongst the locations below and the make up of the units an average price of 320k seems high enough. New buyers must be expecting rental prices to hold up I imagine.

The disposal included leased apartments in a number of locations in Dublin, including Dublin 8, the IFSC, Sandyford and Tallaght, as well as three small commercial units.

Ozark707

cgcsb wrote: »

Whatever about 2 beds in D4 as long as manky suburban apartments loose their 2k a month notions then I think we'll be laughing. In a healthy market Santry should be a lot more than 10% cheaper than D4.

I guess that is where the likes of HAP payments might help to put a floor under prices. I told this guy that he could do better (probably 10%) if he was looking now as there are lots of places now in D4 with an asking price of less than 2k and I don't see why anyone would be paying asking anymore.

Claw Hammer

cgcsb wrote: »

Whatever about 2 beds in D4 as long as manky suburban apartments loose their 2k a month notions then I think we'll be laughing. In a healthy market Santry should be a lot more than 10% cheaper than D4.

Rents vary relatively little by location compared with the variation in prices. I recall a time when a flat in Gardiner Street commanded the same rent as the identical rent on Waterloo Road and that when Gardiner Street was a very down-market area.

AssetBacked2

brisan wrote: »

https://www.independent.ie/business/commercial-property/irelands-biggest-private-landlord-sells-151-apartments-for-48m-39732973.html
Irelands biggest landlord sells 150 apartments for 48m
Roughly 320k each.

The objective of the sale was to deliver operational and asset management efficiencies from the portfolio. The proceeds from the sale will provide added liquidity, which can be used for growth opportunities, the company said in a statement.

If that is the case then we should expect to see Ires add to their portfolio; I'd be watching them closely to see if they add anything. The phrasing "will provide added liquidity, which can be used for growth opportunities" doesn't mean it will be so used.

brisan

AssetBacked2 wrote: »

If that is the case then we should expect to see Ires add to their portfolio; I'd be watching them closely to see if they add anything. The phrasing "will provide added liquidity, which can be used for growth opportunities" doesn't mean it will be so used.

They will wait to see how the market pans out
If all those high quality expensive apartment in Dublin stay unoccupied then I would say they will hold tight
Either that or go into houses rather than apartments

Claw Hammer

AssetBacked2 wrote: »

If that is the case then we should expect to see Ires add to their portfolio; I'd be watching them closely to see if they add anything. The phrasing "will provide added liquidity, which can be used for growth opportunities" doesn't mean it will be so used.

That article notes they are adding to their portfolio, building some and buying an entire new development. The sale is justified on the basis that they are rationalising, and profit taking.

AssetBacked2

And justified in order to provide liquidity.

Donald Trump

Woah wrote: »

Completely anecdotal but I am currently looking for a room in a house share and prices don't seem to have come down at all. Landlords don't seem to be willing to drop the rent if they have current tenants in the house even if one room is vacant as they expect the other tenants to make up the extra rent.
Have experienced this myself as we can't fill the vacant room so have to call it quits and find somewhere new.

Quality of some of the rooms available is still as shocking as ever too sadly but yeah some ok deals if you are looking for a new tenancy in a one or two bed.

I would imagine it would depend on who is responsible for filling the room.

If one of the tenants holds the lease in their name and brings in other tenants then there is no incentive on the landlord to drop the rent because the remaining tenants would still have to pay the full rent if the room remains empty

agoodpunt

Talked to an agent the other day pool of propective tenants is very limited most who are looking to move are ones who wouldnt have got a viewing before 2 line refs probably made up and questionable ability to pay in the long term.
better wait six months prices drops irrelevant its risk of being stuck with some one who cant pay

Ozark707

agoodpunt wrote: »

Talked to an agent the other day pool of propective tenants is very limited most who are looking to move are ones who wouldnt have got a viewing before 2 line refs probably made up and questionable ability to pay in the long term.
better wait six months prices drops irrelevant its risk of being stuck with some one who cant pay

I imagine a 6 month gap for many is not sustainable though. Interesting insight though.

Hubertj

Running through rathmines this morning. Queues of about 10 people outside a property on lower rathmines road to view apartment(s). Was surprised at that considering availability, must be at very attractive prices.

Ozark707

Hubertj wrote: »

Running through rathmines this morning. Queues of about 10 people outside a property on lower rathmines road to view apartment(s). Was surprised at that considering availability, must be at very attractive prices.

Not this place by any chance?

https://www.daft.ie/dublin/apartments-for-rent/rathmines/apt-29-auburn-house-rathmines-dublin-3126612/

3 bed for 2k which has been reduced from 2750.

Hubertj

Ozark707 wrote: »

Not this place by any chance?

https://www.daft.ie/dublin/apartments-for-rent/rathmines/apt-29-auburn-house-rathmines-dublin-3126612/

3 bed for 2k which has been reduced from 2750.

No, the queues was outside 1 of the Georgian buildings on lower rathmines road. On left hand side heading to ward rathmines village....

Ozark707

Hubertj wrote: »

No, the queues was outside 1 of the Georgian buildings on lower rathmines road. On left hand side heading to ward rathmines village....

Ok, I would expect a 3 bed going for 2k in Rathmines should now garner a lot of interest as well. If priced correctly there is will be no problem filling places (I guess many now who were paying exorbitant rents and now looking to take advantage of the much better value out there now).

Edgware

There is far greater availability of accommodation than 12 months ago. Rents are dropping and landlords who are holding out for last years rents are finding it a lot more difficult to secure tenants

Yyhhuuu

Edgware wrote: »

There is far greater availability of accommodation than 12 months ago. Rents are dropping and landlords who are holding out for last years rents are finding it a lot more difficult to secure tenants

Could you you give examples in support of this assertion.

My understanding from the various reports was there was an incredible short supply of rented property, particularly apartments in the Dublin area and other major cities.

Ozark707

Yyhhuuu wrote: »

Could you you give examples in support of this assertion.

My understanding from the various reports was there was an incredible short supply of rented property, particularly apartments in the Dublin area and other major cities.

Look at the volume here. Also you can see from the onset of the pandemic asking prices are down ~20% for the likes of 1/2 bed apts.

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

Darc19

Ozark707 wrote: »

While not knowing the exact spread amongst the locations below and the make up of the units an average price of 320k seems high enough. New buyers must be expecting rental prices to hold up I imagine.

The big funds are happy with 3%-4% returns (Canadian and German examples), so €1200 - €1300 a month on average should produce returns of near 4% after expenses.

Browney7

Darc19 wrote: »

The big funds are happy with 3%-4% returns (Canadian and German examples), so €1200 - €1300 a month on average should produce returns of near 4% after expenses.

Especially if the state is guaranteeing these via HAP enhanced lease deals over 20 years where if the fund lent directly to the Irish government by buying government bonds their yield would be near zero!!!

Edgware

Yyhhuuu wrote: »

Could you you give examples in support of this assertion.

My understanding from the various reports was there was an incredible short supply of rented property, particularly apartments in the Dublin area and other major cities.

Your understanding is incorrect. There are 99 one bedroomed apartments listed on Daft for Dublin 6 today. This time last year I was helping someone looking for an apartment. The one beds in Dublin 6 was in single figures and those were at a higher rent.

Edgware

Ozark707 wrote: »

Look at the volume here. Also you can see from the onset of the pandemic asking prices are down ~20% for the likes of 1/2 bed apts.

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

Correct. There are problems sourcing finance to buy one beds but certainly I see prices on one beds in the Dublin 6 area advertised for 10 to 15 thousand less than last year. Of course with the advent of a vaccine all this may be a reasonably short term phenonomen. If and when tourism kicks off again the Airbnb market will be back and returns will entice landlords back in to that market even allowing for City Council restrictione

Manion

You made a lot of very conclusive assertions based on a single datapoint and then extrapolated it to the entire market. For your theory, which may well be right, it would be worth looking at how long adds are remaining up on daft. Anecdotally you're seeing places stay up for a lot longer than a year ago but there doesn't seem to be any numbers on that.

Edgware

Manion wrote: »

You made a lot of very conclusive assertions based on a single datapoint and then extrapolated it to the entire market. For your theory, which may well be right, it would be worth looking at how long adds are remaining up on daft. Anecdotally you're seeing places stay up for a lot longer than a year ago but there doesn't seem to be any numbers on that.

I would maintain that I am correct across the Dublin market because that is what I am familiar with. Certainly the properties regardless of rental cost are being advertised longer. I suppose there are a number of reasons for this but the main one being reduced demand because

Collapse of the Airbnb market which increased "normal" supply
Full or partial closure of third level colleges
Emptying out of properties by young professionals who are able to work from home and return to the family home to do so instead of paying high Dublin rents
Possible cessation of recruitment of empliyees from abroad by the big multinational I.T. companies
Accidental landlord getting out.
I have noticed though that the big REITs are not reducing rents whereas the one or two property landlord are

ExMachina1000

Have rents gone down significantly in Dublin? This thread was started 8 months ago.

What is the consensus?

Dav010

ExMachina1000 wrote: »

Have rents gone down significantly in Dublin? This thread was started 8 months ago.

What is the consensus?

Apparently rent is down 0.8% in Dublin on the same period last year. And rising in other cities.


https://www.google.ie/amp/s/www.thejournal.ie/housing-crisis-ireland-rents-5260710-Nov2020/%3famp=1

Manion

Edgware wrote: »

I would maintain that I am correct across the Dublin market because that is what I am familiar with. Certainly the properties regardless of rental cost are being advertised longer. I suppose there are a number of reasons for this but the main one being reduced demand because

Collapse of the Airbnb market which increased "normal" supply
Full or partial closure of third level colleges
Emptying out of properties by young professionals who are able to work from home and return to the family home to do so instead of paying high Dublin rents
Possible cessation of recruitment of empliyees from abroad by the big multinational I.T. companies
Accidental landlord getting out.
I have noticed though that the big REITs are not reducing rents whereas the one or two property landlord are

I think the point of the other poster was that it's hard to known if we have gone from extreme under supply of accommodation to simple an under supply or a moderate over supply. In a properly functioning housing market you'd look at these numbers, especially for apartments in Dublin and say there has been a major correction, but that wasn't the situation we were in a year ago. We were in some bizarre upside down world. I rented out a property i own in Dublin for the first time last year through an agent. There were over 1 thousand expressions of interest in the property and the short list of candidates ran into hundreds. It seemed insane to me. Definitely not a properly functioning market.

ExMachina1000 wrote: »

Have rents gone down significantly in Dublin? This thread was started 8 months ago.

What is the consensus?

I've not seen a consensus on this thread. The daft report would indicate that no, there has not been a significant drop in rent in Dublin in general based on the data they have. There has been some shifts in specific segments of the market such as apartments (~3% drop yoy) while other segments are flat of slightly positive yoy. Houses with 3 bedrooms plus seem more resilient.

A few caveats to consider:

• Daft, and therefore the Daft report has only a record of the asking rent, not the final agreed price. Landlords are definitely incentived to cut door step deals as opposed to lower the top line rent.
  
• Estate agents are incentived to close out adds for properties that have been withdrawn from the market as let agreed.
  
• Daft.ie has no visibility of sitting tenant negotiation of rent reductions. I'm sure no ones in a rush to let the RTB know either.

So it all comes down to how impactful the above are and what you want to do with the data.

Edgware

"Have rents gone down significantly?"
"Significantly" is what is in question and I would have to say no to that.
Two bedroomed apartments in D6 D14 D16 hitting 2000 a month last year are sitting at that or maybe 1875ish Is that a significant reduction? I don't think so.
The only positive is that rents have stopped rising. But a person paying nearly 1000 a month for a room in a shared apartment is exhorbitant.