Irish Property Rental rates are falling by 3% on average across the country. Areas outside major cities are seeing 5% drops or more since the last daft rental report. The latest data show an average decrease of more than €20 in rents, combined with a sharp increase in the stock of available rental accommodation.
Rental properties in the areas bordering major cities like Dublin's commuter belt have seen rents drop between 3% and 5%. The cities themselves fare little better, with Cork city seeing the worst decline of 5.3%, taking the average rent down to €993. It should be said that the amounts dropped are still small relative to the overall rents being charged.
Daft in its latest rental report says the average rent for the third quarter in 2008 in South County Dublin was €1,538. In this area, Landlords are asking for 4.8% less in rent than this time last year. The drop is costing South Dublin landlords €74 a month. Given the rapid falls in other areas of the property market to date, these slight sticker price discounts will not seem as dramatic, but they are indicators of a solid downward trend caused by flagging demand and chronic oversupply in certain areas.
According to Ronan Lyons, Economist with Daft.ie, the current down-turn in rents is closely related to ongoing uncertainty in the broader housing market. "In the second half of 2007, rents were rising at double-digit rates as potential first-time buyers postponed buying as they saw house prices falling. Since then the rental market has been flooded by those properties that aren't selling, reversing the trend of increasing rents".
He added "2006 and 2007 saw an unprecedented number of new homes built in Ireland - probably over 170,000 in two years. With no shortage of unsold properties, rents can be expected to continue to fall for perhaps another 12 months. Much lower numbers of new homes built from 2009 on - perhaps only 55,000 over the course of 2009 and 2010 - should bring Ireland's property market back into balance."
Dr. Stephen Kinsella, economist and lecturer at the University of Limerick, noted that "everyone renting in Ireland will feel relief from the familiar pressure of ever-increasing rents. This decrease in rents will help their bank balances, and make them a little richer, and perhaps they will spend some of that extra money, and so help the economy out of the downturn. The rental price drops help those in some of the weakest positions in Irish society: those in need of short term accommodation in a high cost economy, migrants, and those on lower incomes".
