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04-04-2020, 22:56   #1
WhiteMemento9
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Dublin - Significant reduction in rents coming?

It has been well publicised that supply in Dublin has increased dramatically over the last couple of months. This IrishTimes article claims we have an 86% increase in available properties.

Comparison of 2 bedroom flats under €2000 from February to now

Map from that thread showing the supply increase Apartments - https://imgur.com/xUObSsj

Prices still haven't significantly reduced to match the current supply. We have other pressure from people who have lost jobs, salary reductions etc.
There is likely to be a lag before we see a reduction across the board but it should come.

I think many of the Airbnb's that have come back onto the market recently, initially thought they would just make them available for 2-3 month short term rentals and then return to their illegal business after this is over but many of them are seeing the truth that this will likely last longer and even after restrictions lift it will be 6-12 months before confidence gets restored around the world in travel and in turn demand for Airbnb. I expect to see more of these being offered as full long term rentals as the penny drops. I laugh looking at some of them that have come onto the market as 2-3 month rentals at over market rate even before this mess. Some people live in an alternative reality.

I think the prices will drop as I know from talking to people who are looking at the moment that they are going in with offers for places well below asking and getting accepted.
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04-04-2020, 23:07   #2
Ozark707
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Originally Posted by WhiteMemento9 View Post

I think the prices will drop as I know from talking to people who are looking at the moment that they are going in with offers for places well below asking and getting accepted.
Can you tell what price range and % drop?
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04-04-2020, 23:10   #3
Mr.S
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Short term, yes they’ll probably drop due to the non-existent demand.

Long term, after all this goes back to normal - we’re still going to have a supply issue and rent prices will climb again.

Let’s assume life goes back to normal in September, why would rent prices continue to drop massively? The “bounce back” would presumably be quick and strong.
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04-04-2020, 23:11   #4
WhiteMemento9
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Can you tell what price range and % drop?
I have no idea. Supply and demand will adjust this accordingly in the marker over time but at the moment it is completely out of whack. New properties coming onto the market are doing so at the current market rate so as of yet no real adjustment has taken place.
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04-04-2020, 23:14   #5
Ozark707
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I have no idea. Supply and demand will adjust this accordingly in the marker over time but at the moment it is completely out of whack. Properties coming onto the market at doing so at the current market rate so as of yet no real adjustment has taken place.
You mentioned you were talking to people who had obtained reductions? I am guessing it is over 10% otherwise would not be sizeable IMHO.
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04-04-2020, 23:17   #6
WhiteMemento9
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Short term, yes they’ll probably drop due to the non-existent demand.

Long term, after all this goes back to normal - we’re still going to have a supply issue and rent prices will climb again.

Let’s assume life goes back to normal in September, why would rent prices continue to drop massively? The “bounce back” would presumably be quick and strong.
We we will most likely have a decent amount of normaility returned by September but without a vaccine the landscape of travel will look very different for much longer. Even just returning confidence of people to travel will take time. Confidence in self catering style accommodation will also be a hard sell for the foreseeable future. I think the outlook for Airbnb is very bleak for at least a year.
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04-04-2020, 23:19   #7
WhiteMemento9
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You mentioned you were talking to people who had obtained reductions? I am guessing it is over 10% otherwise would not be sizeable IMHO.
2300 -- > 1800. That Irish Times article I quoted notes simialr kind of reductions of people going in below asking.
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05-04-2020, 08:10   #8
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We don't have a real market at the moment. Agents are closed for viewings, businesses are closed, people are staying at home. Its really hard to base "movement" on what is happening at this time.

Some of the impacts of this will last longer than the lockdown. There will be some level of economic downturn/recession. Unemployment will rise. Rents reduced to deal with short term shock will be caught in RPZ restrictions and cant bounce quickly.

How supply v demand will move when life gets back to normal is difficult to predict. Will some stock go back into AirBnB. Will more Landlords sell up. Will there be more HAP funded tenants chasing rental property. Will the number of properties being built be impacted.

For 12 months from now, I think its too early to call where we will be. I believe its too early to call long term impacts until lockdown is over and we can see the position unfold.
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05-04-2020, 09:06   #9
Reversal
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Let’s assume life goes back to normal in September, why would rent prices continue to drop massively? The “bounce back” would presumably be quick and strong.
Just on this point. The experts have given up on a bounce back. This situation has already got too big and gone on too long allow a V shaped recovery. All the economic predictions out there point to half of COVID job losses being permanent. And earnings will take a hit across the board.

A number of weeks ago there was hope of a bounce back but it's gone.

https://www-irishtimes-com.cdn.ampproject.org/v/s/www.irishtimes.com/business/economy/goodbye-leprechaun-economics-hello-another-grim-milestone-1.4219469?amp_js_v=a3&amp_gsa=1&usqp=mq331AQFKAGwASA%3D#referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s&ampshare=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fgoodbye-leprechaun-economics-hello-another-grim-milestone-1.4219469

Last edited by Reversal; 05-04-2020 at 09:13.
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05-04-2020, 10:04   #10
Gumbo
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Short term, many are back on the market, removed from Air BnB due to C19 and lack of tourists.

Tenants need to be mindful of the 6 month (Part 4) rule as I insignia the same properties will be back on the short term let scene in 6 months.
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05-04-2020, 11:19   #11
Ozark707
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Tenants need to be mindful of the 6 month (Part 4) rule as I insignia the same properties will be back on the short term let scene in 6 months.
Surely anyone signing anything would look for a 12 month lease? Most of the new stock that I am seeing is looking for 12 months...
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05-04-2020, 11:58   #12
Dav010
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Surely anyone signing anything would look for a 12 month lease? Most of the new stock that I am seeing is looking for 12 months...
Written tenancy agreements are not a requirement. So if the agreement is verbal, or only 6 months written tenancy is offered, then it’ll be a take it or leave it situation.

Personally, the reasons for me choosing to leave the rental market as tenants move out hasn’t changed. I have an Airbnb house that I am just going to wait it out with, and put it up on Airbnb again when things open again later in the year. If rents are falling, the benefits of Airbnb will be even more obvious.
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05-04-2020, 12:06   #13
WhiteMemento9
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Personally, the reasons for me choosing to leave the rental market as tenants move out hasn’t changed. I have an Airbnb house that I am just going to wait it out with, and put it up on Airbnb again when things open again later in the year. If rents are falling, the benefits of Airbnb will be even more obvious.
Where do you expect demand for the Airbnb market to come from when we reopen? Is it in Dublin?
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05-04-2020, 12:50   #14
runswithascript
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Quote:
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I have an Airbnb house that I am just going to wait it out with, and put it up on Airbnb again when things open again later in the year. If rents are falling, the benefits of Airbnb will be even more obvious.
Shame on you. You are a major part of the property problem in our society.

I hope we will soon have a government here that will restrict or even better yet ban Airbnb completely, just like these places:

https://www.passiveairbnb.com/top-ci...or-restricted/
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05-04-2020, 12:59   #15
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Shame on you. You are a major part of the property problem in our society.

I hope we will soon have a government here that will restrict or even better yet ban Airbnb completely, just like these places:

https://www.passiveairbnb.com/top-ci...or-restricted/
His property to do what he likes with it, even using it as a Airbnb he is benefiting tourism.
your beef should be with the government not building enough properties or selling 95% of new apartments to vulture funds
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