There’s been a marginal pick-up in rents in Dublin city centre but many blocks remain empty in outlying suburbs
LETTINGS HAVE replaced sales as the main business for many of Dublin’s largest estate agencies. The change has been triggered by a collapse in mortgage approvals, now at their lowest level for five years.
The shift has led to an earlier than expected recovery in the rental market, particularly in the city and the inner suburbs where the vacancy rate has fallen in the first two months of the year.
A report from Daft this week confirms that rents are rising again for the first time in two years. Rents in January rose by just over 1 per cent, after heavy falls in 2009.
The marginal pick-up is particularly noticeable in Dublin city where supply is more limited than in the suburbs and beyond the M50. In the south Docklands, for instance, there is a shortage of apartments to let with a number of big employers in the area, like Google, still recruiting staff. Average rents in the area are about €1,400 for two-beds with one-beds from €950 to €1,200 per month. Apartments typically rent in two/three weeks according to the Owen Reilly agency which specialises in Docklands property.
Long established letting agents have been recruiting extra staff to deal with the demand from young professionals, overseas workers and families taking a break from home ownership – a growing segment of the market. Several new agencies have also set up to corner part of the lucrative letting market.
One of the biggest agencies, Sherry Fitz-Gerald Lettings, has seen its business expand rapidly over the past year. Director Eileen Sheehy says that because of the upsurge in demand for rentals, she expects demand to outstrip supply in some areas of the city. The reason: the buy-to-let market has died and few new builds are coming on stream.
However, with a large number of unsold apartments and houses overhanging the market, there is no shortage of rental properties in the outer suburbs. In Tallaght alone there are about 800 completed apartments that are slowly being let by liquidators for development firms that have run into trouble.
There are yet more blocks lying empty in the north Docklands, but the opening of the Luas line is already generating new interest. This is also happening in Sandyford, says Stephen McCarthy of Space4U.ie, a new sales and lettings agency that has let 25 apartments in the Sandyford area since the start of the year. The average letting time, says McCarthy, is little more than a week.
This may come as news to many landlords who are still experiencing long void periods as tenants barter for lower rents and shorter leases. Most 12-month leases now allow for a break after six months.
Letting agent Caroline McArdle of Lisney’s Dún Laoghaire office says there is no increase in rents in an area that runs from Blackrock to Greystones and includes parts of Foxrock and Sandyford. “If anything we are reducing rents slightly to get them let quickly. Tenants who are staying on will ask you to re-negotiate. Certainly we are not seeing rent increases and, with the high supply out there, it’s hard to see it happening. For instance, today there are 99 properties registered for rent in Dún Laoghaire, and 35 in Dalkey. That’s high.”
McArdle says that corporate rents are coming down, too, with most executives having a strict rental budget. “Houses that had been getting €7,000 a month are now down to €5,500 and lower. Many of those who are coming in have budgets of €3,500 to €4,500. Landlords are coming down to meet them. Otherwise the properties sit on the market. There are no new landlords coming into the picture,” she says, and this is echoed by agents across the city. There is little incentive now to invest in rentals, with increasing indications that the Government may increase taxes.
Tenants have become fussier than ever about location, price and standards, say agents based in Dublin city centre, and prospective tenants are bargaining hard, says Paul Aherne of estate agency Felicity Fox. Typically, he has seen rents negotiated down from €1,500 a month to €1,200, even when a tenant is in place. “The landlord’s view is often to hang on to a tenant rather than go looking for a new one,” says Aherne.
Ciaran Curley of Smith Curley has also seen people renegotiating, from say €1,700 a month to €1,450. Agents agree that the market seems to have bottomed out, although it has further to fall in outlying areas, says Aherne: “You always get landlords that hold out for a bit more but week by week they are losing rent.”
Robbie Ward, at Lowe Associates, says that “rents have stopped sliding and, in some instances, have actually risen.” However, tenancies are less secure than ever with an increasing number of tenants handing back their keys as they lose jobs or return home. Salary cuts are also leading tenants to demand rent reductions. In most cases this is being granted by landlords, sometimes under pressure from letting agents to secure a deal.
Rathmines and Ranelagh remain the popular rental areas they have always been and, say agents, anything in the city centre or within a five to eight mile radius or with transport links continues to be sought-after. All agents agree that, if landlords want a tenant, the property has to be in good condition. Stock that hasn’t been renovated will have a lower rent. Properties in the right areas and right condition typically take one to two weeks to let while those aimed at the corporate market – which has seen a considerable fall-back – can take months. The most expensive properties on agents’ books include a five-bed house in Edward Square, Donnybrook with Felicity Fox at €5,000 a month and a five-bed in Clonskeagh for €4,000 with Lowe. Average rents for a one-bed are €800-€1,000 with two-beds at €1,000 upwards. At the cheaper end, Lowe has studios in Rathmines (sharing a bathroom with other tenants) for €450 a month and Felicity Fox rented a two-bed apartment off the South Circular Road for €900 on its first viewing.
Three-bed apartments which the planners hoped would attract families into the city are still the most difficult to shift, according to Owen Reilly and Stephen McCarthy.
It's supposed to be a renters' market so why can't we find the right house, asks ROSEMARY Mac CABE
"WELL, I'VE a lot of people to choose from," he says. I'm taken aback; this isn't how I imagined this conversation. "But . . . maybe I'm interested. Tell me about yourself."
Usually, this would be the haughty, stomping-off point – but this isn't Copper's on a Saturday night and I'm not auditioning for arm-candy of the week; instead, I'm trying to find a house for myself and two friends to rent, and this is prospective landlord number 1,254. "Well, there are three of us," I begin, before being abruptly cut off. "Nah, sorry, I'm looking for one person, maximum two."
The house is €1,300. So, if Mr Picky's looking for one tenant, that tenant will be paying almost an average month's wage to live in a two-bed semi off Clanbrassil Street.
What renters' market? Living at home has its perks but the time comes when living off the beaten track in Kildare hinders one's social possibilities. Yet the decision to move closer to work and civilisation is but the first step; the hunt is a different animal and one that could occupy every free hour.
Start with finding housemates; a college friend and her boyfriend want to move somewhere "homely", with a bigger living space, so we discuss our budget and our criteria: maximum €1,300 a month, two double beds (I'm a sprawler), and house, rather than apartment. So far, easy.
The hunt begins in a house in Stoneybatter. I fall in love with its homeliness. It's been renovated; there's a modern kitchen, and the living area is bright, yet cosy. One of the two double bedrooms has access to a roof terrace. I'm a yes, but good things never come in threes, and we can't agree; it might be too small, there's no bath, will it be bright enough? It's also €1,300 a month, compared to €1,000 for a similar house. The next is a semi in Portobello, in a gated complex. I dislike that; and the kitchen seems that little bit too old. Again, €1,300.
Tristan, the boyfriend, goes to see a house in Kilmainham. His appointment is at 5.30pm and the agent arrives at 6.30pm, saying: "Well, you're some man to wait around for me for an hour." Nice. The house is as advertised – bright, roomy, with a garden and bath – and we all vote yes. Tristan contacts the agent the next day, who says, "oh, yeah, sorry, that was let this morning".
Next? Another Kilmainham semi. We go to see it and are not the only prospective tenants in the village; and the more people you have in your small house, the smaller it seems. We see four properties – and learn that it takes careful analysis of advertisements. Attic bedrooms usually have low roofs and little wardrobe space; and "artisan dwelling" often translates to "tiny".
We go back to the house in Stoneybatter. We go in at €1,150, but the agent says there's an offer of €1,200, so we match that. They call to say the others' references didn't work out: the house is ours, should we fulfil their criteria.
No matter how negotiable rents seem, the landlords own the houses and, as in the Ireland of yore, property is power.
