Rents hit all-time high

[freedomlover]

The RTE web site reports the latest Daft report on rents (although I couldn't find it yet on the Daft web site itself). It finds that average monthly rents have hit an all-time high, up 6.6% in the past twelve months. Not only have rents hit an all-time high, but, according to Daft, in Dublin and Limerick the cost of renting a property is now as high as the cost of buying one.

No doubt we'll be told that this latest survey marks the peak and that rents will plummet from now on (we always are). But, consider the following. In the past twelve months, during which rents have climbed to a new peak, the output of new houses has remained very close to its peak. I reckon about 84,000 new houses were completed in the twelve months to September 2007. All are agreed that in the next twelve months to September 2008, the number of new houses completed is going to fall sharply, to somewhere in the range 45,000 to 65,000 depending on who you believe. So, we're being asked to believe by some people that, having risen by 6.6% in the period when 84,000 new houses came on stream, rents are going to plummet during a period when possibly only half that number come on stream. Dream on.


http://www.rte.ie/business/2007/1127/daft.html

The contents of the RTE report are below.

Average monthly rent hits new high of €1,400.

A new report from property website Daft.ie indicates that average residential rents have increased by 6.6% in the past 12 months, with the average monthly rent at an all-time high of over €1,400.

The report says that the rent of a one bedroomed dwelling ranges from €1,135 in Dublin city centre (Dublin 1) to €770 in Cork city. Rents for three bedroomed houses range from €2,017 in Dublin city centre to €1,164 in Cork city.

Daft says the rent rise comes at a time when many areas across the country have been experiencing falling house prices.

It says this had led to a scenario in certain areas in Dublin and Limerick, where the cost of buying a property is the same as the cost of renting one.

However, Daft says that the trend of increasing rents may not continue, as the rate of growth has slowed to single digits and the supply of rental property has never been higher.

[meriwether]

Lets ask ourselves why rent has jumped, according to this daft report.

Why has rent jumped, when house completions are, as you assert, close to peak?
Why, applying supply and demand, has supply decreased, or demand increased?
Can there be less houses, or more people?
The answer is less houses. But how? Seeing as completions are at peak according to figures guesstimared by Freedomlover (terms and conditions apply)?
Because tenants were being turfed out of their houses, by landlords hoping to sell ASAP when sentiment changed a few months back.

There aren't too few houses to live in. There are too few houses to rent.
Once the houses dont sell (and they aren't, people are not buying), while at the same time mortgage repayments must continue to be made, and the houses are earning no income, they will be put back on the rent market.

Rent will fall quite quickly next year. The Irish Times report last week about the 10k free units corroborates this.

[Aindriu]

Rent will fall quite quickly next year. The Irish Times report last week about the 10k free units corroborates this.

I won't hold my breath waiting. Mine increased recently by 15% because it was that or the landlord sold out from under us! I know a lot of people in the same boat too.

[kerrynorth]

Daftwatch says that supply has surged to 9000 from 4000 April and rents have commenced falling again. Freedomlover, yet again, is living in the past with his data.

[freedomlover]

Lets ask ourselves why rent has jumped, according to this daft report.

Why has rent jumped, when house completions are, as you assert, close to peak?
Why, applying supply and demand, has supply decreased, or demand increased?
Can there be less houses, or more people?
The answer is less houses. But how? Seeing as completions are at peak according to figures guesstimared by Freedomlover (terms and conditions apply)?
Because tenants were being turfed out of their houses, by landlords hoping to sell ASAP when sentiment changed a few months back.

There aren't too few houses to live in. There are too few houses to rent.
Once the houses dont sell (and they aren't, people are not buying), while at the same time mortgage repayments must continue to be made, and the houses are earning no income, they will be put back on the rent market.

Rent will fall quite quickly next year. The Irish Times report last week about the 10k free units corroborates this.

Whatever the merits or otherwise of your speculation about the number of houses available and the reasons why they may or may not be put on the market, the one thing we know for sure is that there are more people. The population increased by over 100,000 in the year to August. Quite probably a similar increase in the year to next August. And very likely large population increases in the years after that, although too early to know exactly how large.

[meriwether]

Rent will fall quite quickly next year. The Irish Times report last week about the 10k free units corroborates this.

I won't hold my breath waiting. Mine increased recently by 15% because it was that or the landlord sold out from under us! I know a lot of people in the same boat too.

Which proves my point.
He wanted to sell.
But houses aren't selling, They are lying idle, earning no money, on the books of auctioneers.
Play the waiting game, and soon it will be you laying down ultimatums to your landlord.

[meriwether]

Lets ask ourselves why rent has jumped, according to this daft report.

Why has rent jumped, when house completions are, as you assert, close to peak?
Why, applying supply and demand, has supply decreased, or demand increased?
Can there be less houses, or more people?
The answer is less houses. But how? Seeing as completions are at peak according to figures guesstimared by Freedomlover (terms and conditions apply)?
Because tenants were being turfed out of their houses, by landlords hoping to sell ASAP when sentiment changed a few months back.

There aren't too few houses to live in. There are too few houses to rent.
Once the houses dont sell (and they aren't, people are not buying), while at the same time mortgage repayments must continue to be made, and the houses are earning no income, they will be put back on the rent market.

Rent will fall quite quickly next year. The Irish Times report last week about the 10k free units corroborates this.

Whatever the merits or otherwise of your speculation about the number of houses available and the reasons why they may or may not be put on the market, the one thing we know for sure is that there are more people. The population increased by over 100,000 in the year to August. Quite probably a similar increase in the year to next August. And very likely large population increases in the years after that, although too early to know exactly how large.

Why is it 'likely'?
Construction is slowing down. Immigration will slow. Of the other constituents of the population increase, new born babies are unlikely to be seeking to get on the property ladder until at least they get their communion money.

Oh, and if there are so many people, why did the IT report that there were 10k units lying idle last week, Freedomlover?

Its not people, its supply.

[Aindriu]

Construction is slowing down. Immigration will slow.

And emigration may increase as eastern european construction workers start to head off elsewhere in their search for streets paved with gold.

[freedomlover]

Its not people, its supply.

Its both. Never heard of the Law of Supply or the Law of Demand. Its the Law of Supply and Demand. The two go together.

[meriwether]

Its not people, its supply.

Its both. Never heard of the Law of Supply or the Law of Demand. Its the Law of Supply and Demand. The two go together.

Blow me down.
Anyhow, whats your comments re the 10k free units as reported in the Times last week?
It rather debunks your demand theory doesn't it?
After all, these 100k people- where are they living if there are 10k free units?