Daft Report - rents down up to 20%

[Scorpio]

On the radio this morning, latest daft report shows rents down up to 20%.
It's over on daft at: Ronan Lyons introduces the Daft Report.
The PDF of the report is here: http://www.daft.ie/report/Daft-Renta...rt-Q2-2009.pdf

Great news for tenants and students, I should think.
Hopefully, State-paid rents will follow suit... Does anyone know how much the State spends on rent every year? How much would a saving of 30% represent?

[constitutionus]

interesting thing about this is if you use the criteria for assessing purchase value from rent

which IIRC is 12xmonthly rent and multiply by 16

this means the national average cost of a house is now 153600 euro.

[Aindriu]

interesting thing about this is if you use the criteria for assessing purchase value from rent

which IIRC is 12xmonthly rent and multiply by 16

this means the national average cost of a house is now 153600 euro.

Still got some way to fall then for prices to be realistic. Good that rents are falling too. Bad news is that many tenant's rents will NOT fall as their landlords have mortgage payments that are higher than the rent they receive and they can't absorb anymore loss themselves.

[Kevin Doyle]

Still got some way to fall then for prices to be realistic. Good that rents are falling too. Bad news is that many tenant's rents will NOT fall as their landlords have mortgage payments that are higher than the rent they receive and they can't absorb anymore loss themselves.

Thats not how it works, supply is now far outstripping demand. Where a landlord refuses to drop rents the tenants simply move somewhere else for less rent. The way the renting market is going at present many people are finding themselves able to get better rental property for less and so it continues. A landlord is far better off getting some percentage of his mortages repayments than none at all.

[seabhcan]

As last month’s House Price Report showed, the average asking price in South
County Dublin, which peaked at €680,000, has fallen over 30%. By comparison, asking prices in South-East Leinster have
fallen just 18%. It is easy to think why prices at the top end of the market have fallen more than prices in cheaper areas: while
the boom fuelled house prices everywhere, the very top end of the market saw the biggest excesses.
In economic terms, the lower the house price bracket, the more prices are driven by affordability, i.e. determined by
fundamental criteria such as average wages and interest rates. The higher the price bracket, the more prices are driven by
confidence, i.e. determined by ‘future expected value’, what the buyer thinks the property will be worth when it is sold again.

Sounds like he's saying lower income people are bad negotiators. Actually, I think he's right. Many Irish people seem to enter a property negotiation with the question "What is the most I can afford", not "What is the least I can pay".

[Dios]

interesting thing about this is if you use the criteria for assessing purchase value from rent

which IIRC is 12xmonthly rent and multiply by 16

Yes, thats the elephant in the corner alright. Its multiply by anywhere from 12 to 16 (6% to 8% rental returns), depending on local conditions and desireability.

Thats not how it works, supply is now far outstripping demand. Where a landlord refuses to drop rents the tenants simply move somewhere else for less rent.

Indeed, they aren't running a pub.

[shutuplaura]

Sounds like he's saying lower income people are bad negotiators. Actually, I think he's right. Many Irish people seem to enter a property negotiation with the question "What is the most I can afford", not "What is the least I can pay".

I'm not sure he is saying that. I think its perhaps the opposite actually.

You are probably right though - getting value for money was never our thing really, not least during the boom years.

Hopefully this will force the worst landlords, who still let out dog kennels in central Dublin (and elsewhere) to actually invest in their properties to avoid loosing all rental income.

[Aindriu]

Thats not how it works, supply is now far outstripping demand. Where a landlord refuses to drop rents the tenants simply move somewhere else for less rent. The way the renting market is going at present many people are finding themselves able to get better rental property for less and so it continues. A landlord is far better off getting some percentage of his mortages repayments than none at all.

Easier said than done. If you are tied into a minimum term lease you have no option but to remain where you are until the lease expires. Plus, it makes it extremely dificult to put down roots when you have to keep moving to get lower rents. We need a system of rent and lease control like they have in Germany. Private tenants have lots of protection there and rents are controlled in ways other than the vagaries of ther market.

[zakalwe1]

we moved from a 1 bed to 2 bed in the same block and negociated a decrease in rent of 12%. real terms i'd say the decrease in SE dublin is greater as the letting price is invariably less than the asking price by approx E100 pm.

[seabhcan]

we moved from a 1 bed to 2 bed in the same block and negociated a decrease in rent of 12%. real terms i'd say the decrease in SE dublin is greater as the letting price is invariably less than the asking price by approx E100 pm.

I negotiated 25% off my 2 bed in North Dublin. It took two phone calls.