Daft Rental Report Q3 2012

7/30/2019 Daft Rental Report Q3 2012

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Introduction by Dr. Lorcan Sirr, Lecturer, DIT School o Real Estate and Construction Economics

The Dat.ie Rental ReportAn analysis o recent trends in the Irish rental market

2012 Q3


2/12

IntroductionIntroduction by Dr. Lorcan Sirr, Lecturer, DIT

The rental market is changing,and changing rapidly

2 | The Dat.ie Rental Report - 2012 Q3

The Dat.ie Report has always been an interesting publication, providing a rat o rent-related inormation

and giving a snapshot o lie in the rental market. But who, and what, was this rental market?

With a small degree o artistic licence, I would say that it requently comprised landlords with a couple

o ats that they, oten reluctantly, dealt with ater their day jobs, i at all; more were landlords who had

inherited their properties and really didnt have the knowledge, interest or resources to manage them

properly (the accidental landlords); even more were developers hanging on to their units until capital

values improved; and nally, theres occasional landlord who took an active part in managing their

property and tenants.

And on the tenant side? The rental sector has long had a maligned reputation as a reuge or unruly

students, separated athers, the unemployed, the poor, recent immigrants, and the socially marginalised.Government policy has always been so heavily weighted towards home ownership that there had to be

something wrong i you couldnt or didnt own your own home.

The properties themselves reected this tenant stereotype, with many being on the marginal side o

habitable. And here I withdraw my artistic licence, or as a renter mysel, I have seen what the rental

market requently oers quite recently and what landlords thought was acceptable to ask rent or:

damp, draughty, cold, unhealthy units oten not meeting basic human needs with barred windows and

urniture that a dump would reject. The landlords wouldnt have stayed in their own rental units, but it

was alright or someone else.

The average Irish landlord has between 1.6 and 2.1 properties, depending on which gures (below) are

used, and less than 1.25% has ten or more properties, reecting an undeveloped and amateur market.The amateur nature o the rental market is highlighted in the 31.72% discrepancy in the number o

tenancies registered with the Private Rented Tenancies Board in December 2010 (231,828) and the

number o tenancies recorded by the state Census just our months later (305,377). This is symptomatic

o a ear o regulation a typical amateur notion rather than recognition that regulation would actually

strengthen the market, and indeed, rents.

The legislation governing the landlord and tenant relationship also reects this amateurism. No doubt

inuenced by demands at the time, the Residential Tenancies Act 2004 is now sel-deeating in its

unction. It is heavily biased towards supporting the landlord and as such aords landlords a range o, in

my opinion, spurious reasons whereby they can recover possession o their property.

The Act thereore perpetuates the amateur nature o the market by actively deterring those who wouldwant to rent or the long term.

Continued on next page >

Lorcan Sirr is a lecturer in housing at

Dublin Institute of Technology.

He is a renter, has been a home-owner,

and until recently was also a landlord.


3/12

But the rental market is changing, and changing rapidly, and both the Act and landlords are going to have to adapt i they

want to capture what the market has to oer.

The numbers o individuals and amilies renting has rocketed in the last ve years. Across Ireland, about 29% o all people now

rent, with 18.5% renting rom the private sector. This is roughly the same level as in the mid-1950s. But what is more interesting

is the speed o change: numbers renting in the private sector have increased 86% (up rom 9.9%) since 2006.

Not alone that, but those renting have also changed, as is reected in the rental increases or specic types o properties.

Family homes are now in big demand as oten previous owners eel reluctant to risk their savings again on the gamble that is

property ownership.

Then there are the DOODs the Dont Own Or Drive cohort who are well-educated, well-travelled, demanding, employed

people who would rather trade a car-parking space and ownership or proximity to services and a decent location to live in.

They could get a mortgage i they wanted to, but its not really or them.

These groups are the antithesis o those who have traditionally rented in the private sector. And no, not all these renters are

hanging on until the market recovers. The recent SCSI/Red C survey shows that 61% o renters would be happy to rent long

term, suitable property and terms being available.

Rents in solid established suburban locations are increasing, meaning that although the type o renter may be changing,

where they want to live is not. Rents are up in Dublin in general and Galway city, and alls in rent are easing elsewhere. Rental

stock is alling everywhere.

All this means there is a new market out there ready to be satised. It also means that to capitalise on this market several things

have to change.

1) Broadly, landlords have to proessionalise and increase the standard o accommodation on oer to meet the requirements

o an increasingly demanding tenant sector. I they dont, they will miss out on the prime tenants who are now out thereseeking accommodation. It also means registering with the PRTB as required by law. It isnt an option.

2) The Residential Tenancies Act has to change to better balance the needs o tenants with those o landlords.

The RTA is currently the opposite o what it needs to be, and deters potential renters rom the market rather than

supporting them.

3) Government policy has to translate into legislation. Equity o tenure is a commendable concept, but would be better still i

it had the orce o law where it balances the rights o those who want to rent with those who want to own.

The Dat.ie Report started o with a relatively narrow market at its core, but that market has now grown considerably. It

may come as a surprise even to itsel, but Dat.ie and its gures arguably reect the most signicant cultural shit in the Irish

property-psyche in the last ty years.

Enjoy.

Introduction (contd)Introduction by Dr. Lorcan Sirr, Lecturer, DIT

The rental market is changing,and changing rapidly



5/12

Rents up 3%year-on-year in Dublinand 2% in Galway

The upward trend in urban rents continued

in Dublin and Galway, while rents in Cork

are now stable in year-on-year terms.

Rents outside cities riseslightly in third quarterOutside the main cities, rents rose 1%

between July and September but remain1.5% lower than a year previously.

Number o propertiesavailable to rent inDublin alls sharplyOn November 1, there were just 2,200

properties available to rent in Dublin,

compared to almost 7,000,

three years previously.

.5

Dat.ie National Rental Index

0.8%Rents nationally were 0.8% higher on average in the thirdquarter o 2012 than a year previously. The average rentnationwide between July and September was 820, comparedto 809 in the previous quarter.


Daft.ie National Rental Index(2007 average = 100)

January

February

March

April

May

June

July

August

September

October

November

December

2002

98.1

96.2

93.2

94.9

94.8

93.4

92.1

91.8

91.0

89.1

87.6

85.7

2007

95.3

98.2

98.8

100.3

100.9

101.6

102.2

101.5

102.1

102.3

97.6

97.0

2008

97.6

99.0

98.4

97.8

99.4

98.6

97.8

97.3

96.6

95.9

94.3

91.7

85.5

86.5

86.7

87.0

85.8

85.3

85.1

85.1

84.8

83.0

81.9

81.4

2003

81.1

80.4

80.2

80.5

80.8

81.2

82.1

83.0

83.5

83.4

82.7

82.4

2004

82.8

82.7

83.6

83.4

83.9

83.8

84.5

85.0

84.9

86.0

86.8

87.9

2005

87.6

86.5

87.0

87.6

90.0

90.9

91.3

92.6

93.9

94.7

94.3

93.9

2006 2010

76.0

77.3

77.0

76.8

76.4

76.5

76.0

75.6

76.1

75.8

76.4

75.4

2009

89.5

89.5

87.9

85.9

83.9

82.7

81.4

80.5

80.2

79.2

78.3

76.7

2011

75.3

76.3

76.0

76.4

75.8

75.6

75.9

76.2

75.8

75.5

75.3

75.6

2012

75.6

75.9

75.9

75.9

75.2

75.5

75.8

76.8

77.0

76.9

Stock of Properties to Rent (start-of-month) & Flow of New Properties to Rent(during entire month), 2007-2008

NumberofProp

erties

Stock Out FlowInflow

0

5000

10000

15000

20000

25000

2007 II III IV 2008 II III IV 2009 II III IV 2010 II III IV 2011 II III IV 2012 II III IV

The index is based on asking rents for

properties advertised to let on Daft.ie. Figures

are calculated from econometric regressions,

which calculate changes in price that are

independent of changes in observable

measures of quality, such as l ocation, or

bedroom number.


6/12


Dat.ie Snapshot o RentNationwide

What can I ask or? Can I aford it?Average rents across Ireland, by postcode/region andbedroom number, Quarter 3, 2012

Daft.ie Snapshot of Rents Nationwide1bed 2bed 3bed 4bed 5bed

Dublin 1

Dublin 2

Dublin 3

Dublin 4

Dublin 5

Dublin 6

Dublin 6W

Dublin 7

Dublin 8

Dublin 9

Dublin 10

Dublin 11Dublin 12

Dublin 13

Dublin 14

Dublin 15

Dublin 16

Dublin 17

Dublin 18

Dublin 20

Dublin 22

Dublin 24

North Co Dublin

South Co Dublin

West Dublin

Cork City

Galway City

Limerick City

Waterford City

Dublin Commuter Counties

West Leinster

South-East Leinster

Munster

Connaught

Ulster

798

946

791

995

734

771

778

703

755

708

724

738730

790

908

756

901

*

907

779

735

739

768

883

713

608

575

441

429

537

393

430

419

398

349

1,118

1,350

1,008

1,435

1,034

1,153

1,096

988

994

991

853

903910

1,030

1,191

918

1,147

917

1,142

964

882

893

883

1,226

913

779

756

589

517

676

483

536

516

463

430

1,478

1,922

1,263

1,990

1,131

1,558

1,352

1,208

1,259

1,206

993

1,0251,100

1,189

1,463

1,070

1,267

1,153

1,411

1,078

980

1,029

1,041

1,628

1,061

856

863

707

657

767

594

631

628

618

561

*

*

1,534

2,707

1,316

2,161

1,725

1,439

1,520

1,492

798

1,2071,246

1,457

1,857

1,226

1,445

798

1,951

1,313

1,100

1,230

1,216

2,244

1,209

1,046

950

806

723

891

641

696

706

649

597

*

*

1,828

4,548

1,645

2,608

2,213

1,816

1,882

1,709

*

1,478*

*

2,418

1,955

2,324

*

2,568

*

3,300

1,166

1,673

3,526

1,626

1,348

1,097

878

805

1,150

690

836

776

740

642


7/12

Trends in Rents Across DublinFrom Quarter 1, 2006 to Quarter 4, 2012


Rent-a-room income trends

AreaAverage

rent% Yr/yrchange

Averagerent

% Yr/yrchange

Dublin City Centre

North Dublin City

South Dublin CityNorth Co. Dublin

South Co. Dublin

West Co. Dublin

398

329

377 290

402

295

-1.5%

0.9%

1.9%2.5%

4.4%

3.9%

500

410

485 376

472

381

-0.2%

2.8%

2.1%1.3%

4.4%

1.9%

Vacancy

3.3

7.2

4.89.3

5.9

8.7

Single Room Double Room

Average rents by region, 2006 - 2012

Dublin City Centre North Dublin City South Dublin City North County Dublin So uth Co unty Dublin West Co unty Dublin

800

1,000

1,200

1,400

1,600

1,800

2,000

2006 Q2 Q3 Q4 2007 Q2 Q3 Q4 2008 Q2 Q3 Q4 2009 Q2 Q3 Q4 2010 Q2 Q3 Q4 2011 Q2 Q3 Q4 2012 Q2 Q3 Q4

West County DublinAverage rent: 975Year-on-year change: 1.3%

Quarter-on-quarter change: 1.5%Change from peak: -26.4%

North County DublinAverage rent: 1,000Year-on-year change: 2.1%


Dublin City CentreAverage rent: 1,020Year-on-year change: 4.0%


North Dublin CityAverage rent: 1,026Year-on-year change: 2.6%


South County DublinAverage rent: 1,362

Year-on-year change: 4.2%Quarter-on-quarter change: 4.2%

Change from peak: -22.5%

South Dublin City

Average rent: 1,162Year-on-year change: 3.3%Quarter-on-quarter change: 2.8%Change from peak: -23.7%

There were 2,200 properties available to rent in Dublinon November 1, the lowest gure since early 2007and down rom almost 7,000 three years ago.

The rent or a room has increased by nearly 5%in the last year in South County Dublin - increaseselsewhere have been smaller.

Compared to rents at their highest in late 2007,rents in the capital are roughly one quarter lower.

Rents in most parts o Dublin are now between 2%and 4% higher than a year ago.


8/12

Trends in Rents in Other CitiesFrom Quarter 1, 2006 to Quarter 4, 2012


Cork City Galway City Limerick City Waterford City

600

700

800

900

1,000

1,100

1,200


Average Rents by region Other Cities, 2006 - 2012



AreaAverage

rent% Yr/yrchange

Averagerent

% Yr/yrchange

Cork City Centre

Cork City Suburbs

Cork Commuter Towns

Galway City Centre

Galway City Suburbs

Limerick City Centre

Limerick City Suburbs

Waterford City Centre

305

266

235

287

272

252

231

253

-1.9%

-4.0%

1.3%

1.1%

1.5%

8.6%

-2.9%

-1.9%

355

316

317

339

309

295

273

257

3.2%

-2.2%

1.0%

2.1%

2.3%

5.0%

0.0%

-3.4%

Vacancy

15.1

14.9

12.7

6.7

8.7

13.3

12.3

21


Cork City

Galway City

Limerick CityWaterford CityAverage rent: 680

Year-on-year change: -2.2%Quarter-on-quarter change: -0.5%Change from peak: -24.0%

Average rent: 624Year-on-year change: -4.0%Quarter-on-quarter change:1.2%Change from peak: -24.8%

Average rent: 792Year-on-year change: 2.2%Quarter-on-quarter change:4.6%Change from peak: -13.9%

Average rent: 867Year-on-year change: -0.4%Quarter-on-quarter change: -3.6%Change from peak: -21.5%

Having risen over much o the previous two

years, rents in Cork have eased back in the lastquarter and are unchanged compared toa year previously.

In Limerick and Waterord cities, rents are stillalling in year-on-year terms, while in Galwaythey are up 2%.

The number o properties available to rent acrossthese our cities on November 1 - at 1,700 -was largely unchanged rom a year previously.

Rent-a-room income has increased in mosturban areas, although they have allen again

in Corks suburbs.


9/12

Trends in rents-rest o the CountryFrom Quarter 1, 2006 to Quarter 4, 2012


Average Rents by region rest of country, 2006-2012

Dublin Commuter Counties West Leinster South-East Leinster Munster Connaught Ulster

500

600

700

800

900

1,000

1,100

1,200



AreaAverage

rent% Yr/Yrchange

Averagerent

% Yr/Yrchange

Dublin Comm. Counties

West Leinster

South-East Leinster

Munster

Connaught

Ulster

274

225

268

226

234

204

-3.3%

3.1%

-4.2%

0.0%

1.6%

11.4%

326

249

281

254

254

232

-0.4%

-0.5%

-0.3%

1.0%

1.3%

0.2%

Vacancy

13.5

16.0

14.5

15.0

17.3

13.1


South-East LeinsterAverage rent: 622Year-on-year change: -1.8%Quarter-on-quarter change:1.4%

Change from peak: -24.8%MunsterAverage rent: 626Year-on-year change: -1.5%Quarter-on-quarter change:0.4%Change from peak: -26.6%

ConnaughtAverage rent: 559Year-on-year change: -1.8%Quarter-on-quarter change: 2.1%Change from peak: -21.7%

UlsterAverage rent: 529Year-on-year change: -2.5%Quarter-on-quarter change: -0.5%Change from peak: -25.2%

West LeinsterAverage rent: 554Year-on-year change: -1.1%Quarter-on-quarter change:0.6%Change from peak: -26.0%

Dublin CommuterCountiesAverage rent: 780Year-on-year change: -0.8%Quarter-on-quarter change:1.7%Change from peak: -28.9%

With rents rising in the autumn slightly, the year-on-year all in rents outside the cities has eased to

1-2% in most regions.

Rents are closest to stabilising in the commutercounties (down 0.8% in a year), while in Ulsterthey are 2.5% lower.

The number o properties available to rent outsidethe main cities on November 1 was just under9,800, compared to 11,600 a year previously

Rent-a-room income or double rooms is largelyunchanged outside the cities, with only slight allsrecorded in Leinster.


10/12

First Time Buyer and Investor Inormation

Can we aford it?The mortgage cost, including mortgage interest relie and incomerom the rent-a-room scheme, by region and bedroom number.


Investor Information: Snapshot of yields across the country

Location \ Bedroom # AverageYr/yr

change 1-bed 2-bed 3-bed 4-bed 5-bed

Dublin City Centre

North Dublin City

South Dublin City

North Dublin County

South Dublin County

West Dublin County


West Leinster

South-East Leinster

Munster

Cork City

Limerick City

Waterford CityConnaught/Ulster

Galway City

Average

8.4%

6.8%

6.2%

6.2%

5.4%

7.4%

5.7%

5.3%

5.5%

4.9%

5.9%

5.8%

6.9%5.4%

6.5%

5.5%

1.2%

0.9%

0.5%

0.8%

0.1%

1.2%

0.8%

0.4%

0.7%

0.6%

0.6%

0.8%

1.0%0.8%

1.4%

0.7%

7.5%

8.4%

8.7%

8.8%

6.2%

8.5%

6.1%

6.5%

8.2%

6.2%

7.4%

6.9%

7.2%

5.4%

8.3%

7.0%

0.0%

1.8%

2.0%

2.4%

0.7%

0.3%

0.0%

0.3%

2.5%

1.2%

1.1%

0.3%

0.4%0.6%

1.7%

1.0%

8.7%

8.2%

6.8%

7.5%

5.8%

8.5%

7.2%

6.9%

7.7%

6.4%

7.5%

7.5%

8.5%

6.8%

6.6%

7.1%

2.1%

1.7%

0.4%

1.6%

0.6%

1.1%

0.9%

0.7%

1.4%

1.0%

1.0%

1.4%

1.6%0.8%

1.2%

1.0%

10.9%

6.1%

5.7%

6.3%

6.0%

7.7%

6.2%

6.6%

5.9%

5.6%

6.1%

6.0%

7.7%

6.6%

7.4%

6.2%

2.2%

0.3%

0.2%

0.5%

0.1%

1.5%

0.9%

0.7%

0.7%

0.7%

0.7%

0.8%

1.5%1.1%

1.5%

0.8%

*

5.6%

4.7%

4.2%

4.3%

5.5%

4.7%

4.5%

4.5%

4.0%

4.9%

4.9%

5.3%

4.9%

6.0%

4.6%

*

0.9%

0.3%

0.4%

0.0%

0.7%

0.6%

0.2%

0.5%

0.5%

0.3%

0.8%

0.3%0.9%

1.3%

0.6%

*

4.4%

5.6%

3.4%

4.0%

5.3%

4.4%

3.3%

4.2%

3.5%

4.7%

3.5%

4.3%

4.3%

4.7%

4.0%

*

0.0%

0.8%

0.2%

-1.5%

1.6%

0.8%

-0.2%

0.6%

0.2%

0.2%

-0.9%

-0.8%0.4%

1.3%

0.3%

Yr/yrchange

Yr/yrchange

Yr/yrchange

Yr/yrchange

Yr/yrchange

First-time buyer information: Rent-a-room income and net loan burden

Location \ Bedroom #

Singleroom

Doubleroom

1-bed,noletting

2-bed,noletting

3-bed,noletting

4-bed,noletting

2-bed,letting 1double


3-bed,letting 1doubleand 1single

Dublin City Centre

North Dublin City

South Dublin City

North Dublin County

South Dublin County

West Dublin County


West Leinster

South-East Leinster

Munster

Cork City

Limerick City

Waterford City

Connaught/Ulster

Galway City

398

329

377

290

402

295

274

225

268

226

269

242

253

219

280

500

410

485

376

472

381

326

249

281

254

329

284

257

243

324

467

346

370

347

554

353

346

247

214

275

324

316

242

283

292

519

467

651

474

768

429

377

286

280

326

415

472

242

284

474

19

57

166

98

296

48

51

37

-1

72

85

188

-15

41

150

545

744

990

654

872

544

497

358

429

453

566

677

348

376

498

45

334

505

278

400

163

170

108

147

199

237

393

91

133

174

-353

5

128

-12

-2

-132

-104

-116

-121

-27

-32

152

-162

-86

-106


4-bed,letting 1doubleand 1single

*

1,005

1,601

1,155

1,976

883

768

568

614

704

858

1,069

542

525

686

*

595

1,116

779

1,504

502

442

319

333

451

529

785

285

282

362

*

266

739

489

1,102

207

168

94

65

225

260

543

32

63

83

Mortgage repayments are based on the following application: 30 years, 4.25% variable mortgage, 90% LTV, 25% mortgage interest relief (joint application)


11/12

About the Report

Over the last 10 years, Dat.ie has collected a vast

amount o data on the Irish property market. In

2011 alone, more than 260,000 properties were

advertised on the site.

The goal o the Dat.ie Report is to use this inormation to help all actors in the property

market make inormed decisions about buying and selling. In addition, because it is

reely available, the Dat.ie Report can help inorm the media, the general public and

policymakers about the latest developments in the property market.

The Dat.ie Rental Report was launched in 2005. It has already become the denitive

barometer o the Irish rental market and is being used by the Central Bank, mortgage

institutions, nancial analysts and the general public alike. Since its introduction at

the start o 2006, the Dat.ie Asking Price Index is also being recognised as the earliest

available reliable indicator o developments in house prices in Ireland.

This is the Dat.ie Rental Report, the partner to the Dat.ie House Price Report issued last

month. Together, they give house-hunters and investors more inormation to help them

make their decisions. These twin reports mean that Dat.ie is the only objective monitor

o trends in both rental and sales markets on a monthly basis, making the report an

essential barometer or anyone with an interest in the Irish property market.

Methodology and Sample Size

The statistics are based on properties advertised on Dat.ie or a given period.

The regressions used are hedonic price regressions, accounting or all available and

measurable attributes o properties and only coefcients with a very high degree o

statistical signicance (p < 0.001) are used.

The average monthly sample size or lettings properties is over 10,000. Indices are

based on standard methods, holding the mix o characteristics constant, with the annual

average o 2007 used as the base. For more on the methodology, please see

www.dat.ie/research.

About Daft.ie

Dat.ie is Irelands largest

property website. The latest

audited report rom ABC (Sep

2011) shows monthly trafc o 130

million page impressions (pages

o inormation received) and 1.976

million unique users per month

across Dat Medias property

websites (dat.ie, rent.ie, let.ie,

property.ie). This makes Dat.ie thebiggest property website in Ireland

across all demographics.

The snapshot on page 7 covers

the period rom Aug to Sep 2012.

Snapshots are a highly generalised

view o the market. They should

only be used as an indicator o

rents and not as a denitive guide

as there are many actors not

included above that aect rents.



12/12

Disclaimer

The Dat.ie Report is prepared

rom inormation that we believe

is collated with care, but we do not

make any statement as to its accuracy

or completeness. We reserve the rightto vary our methodology and to edit

or discontinue the indices, snapshots

or analysis at any time or regulatory

or other reasons. Persons seeking to

place reliance on any inormation

contained in this report or their own

or third party commercial purposes

do so at their own risk.

Credits

Economic Analysis:Ronan Lyons

Data Compilation:

Deirdre Ni Chuilleaneain

Layout and Editing:

Ciara Mulvany

All data is Copyright Dat Media

Limited. The inormation contained in

this report may only be reproduced i

the source is clearly credited.

Please contact Dat.ie on 01-6795040

or urther inormation.

Coming Next

The Dat.ie House Price Report2012 in ReviewIn early January 2013

The Dat.ie House Price Report will be published in early January 2013

and will provide a detailed regional analysis o asking prices and transaction prices

as well as all the usual indices, snapshots, trends and regional analysis, providing

the public with Irelands most up-to-date inormation on the housing market.

Daft Rental Report Q3 2012

Documents