Demand for small properties, in particular for one-bedroom apartments in prime locations in the city centre, is so high at present that supply cannot meet demand. This is reflected in both the ease of letting such accommodation and the rental levels being achieved.
Rental prices for one-bedroom apartments in the city centre are now 15 per cent higher than in January, 1999, and forecasts indicate that rental levels will continue this upward growth.
In 1997, the average rent for a standard one-bedroom property ranged from £450 to £500. In 1998, that figure increased to an average of £500 to £600 per month. In 1999, similar properties were achieving £550 to £650, and with rents continuing to grow, the average one-bedroom apartment will cost upwards of £650 this year.
While two-bedroom properties are in greater supply, and thus are not subject to the same levels of demand, monthly rents have increased by 10 per cent since this period last year. Two-bedroom apartments now let at £850 upwards per month, depending on location and the standard of the accommodation.
City centre rents are approximately £100 higher per month than similar accommodation in Dublin suburbs, but properties near the DART have also experienced similar increases. In general, property values have increased across all sectors, and while this is a principal factor in the upward movement of rents, there are many other significant factors also. Marie Hunt, head of research at Gunne Property Consultants, says "Irish people have traditionally been reluctant to live in rented accommodation, preferring instead to purchase their own property.
As a result of changing attitudes and ever-increasing house prices, it is envisaged that a larger proportion of the population will choose to rent residential accommodation in the future, resulting in a significant reduction in home ownership in this country. This change can be attributed to changing demographics, net inward migration and increase in corporate lettings".
City centre living is becoming more popular among young professionals. Peak hour traffic congestion, lack of adequate transport late at night and the convenience of city living have resulted in many people preferring to live within walking distance of the city centre and places of work.
According to Audrey Strong , manager of the lettings division at Sherry FitzGerald estate agents, "professional single people or couples lease almost three-quarters of the property, which is a reflection of the young demographic profile of the population".
Areas such as Christchurch, Temple Bar and Harcourt Street have traditionally been popular locations, and large-scale developments have taken place in Smithfield, Jervis Street, Parnell Street, the IFSC and the south docks. Construction of new schemes has slowed down in recent years, but the population of Dublin is growing. Since 1993, 13,750 new apartments have been built in the Dublin city centre area, with construction peaking at an all time high of 2,700 new apartments in 1996. Dublin Corporation estimates that the population of the greater Dublin area will expand by 17 per cent between 2001 to 2006.
Future large-scale developments will be concentrated in the docklands, both south and north. The Dublin Docklands Development Authority has compiled a draft plan for the development of residential areas around the Grand Canal Docks, of which 20 per cent will be designated as social housing.
On the opposite side of the quays, the first phase of the Custom House Square development in the IFSC is nearing completion. Many of the 268 apartment units are rented out, but Raymond de Courcy, lettings negotiator with Douglas Newman Good, says the development will only reach its full rental potential next year upon completion of the second phase of 270 apartments.
At present, the complex is a building site, but average monthly rents are still quite high, with the majority of units being of the two-bedroom variety. Average monthly rent for one-bedroom properties is £650, with two-bedroom apartments ranging from £800 upwards. The penthouse apartments with large terraced balconies cost £1,200 and upwards per month. A parking space is available with every apartment, and retail units are soon to open at street level. Smithfield is another area that has seen a large influx of apartment dwellers, with the development of the Smithfield Village and the Old Distillery complexes. Apartments here range in size and furnishings, but on average, a two bedroom property can be let for £900 per month.
City centre accommodation standards have improved in recent years, with landlords investing money in furnishings in order to achieve higher rents. Kitchens are usually fully equipped, balconies, roof gardens and communal landscaped courtyard areas have become common features.
Kathrina Cahill, director of Home Locators, a property letting agency, says that "while one-bedroom properties in good locations can command very high monthly rentals, the standard of rental properties is now very high".
Tenants are demanding a higher standard of accommodation as they are paying premium prices, and landlords are getting a very high return on their properties.
Architecturally, the small apartment schemes in the Temple Bar area are very innovative in design and decor. Complexes such as The Granary, which has five loft-style apartments, or the Green Building, housing eight eco-friendly units, are good examples of this. At present, the Old City scheme in the area, consisting of 191 apartments, is nearing completion. There are five separate complexes, of which the Music Hall is the largest, with 67 apartments of various sizes and decor. One of the drawbacks of city centre living is the lack of car-parking spaces. The Old City development has only 31 parking spaces available for 191 apartments.
There is a good rental market for car-park in the city centre, which can cost upwards of £100 per month.
