# What will happen to rents if the housing market collapses?



## room305 (29 Sep 2006)

This seems to come up regularly in the "consumer sentiment" thread. However, I thought it might be worth a thread of its own to keep the arguments together.

The consensus from what I can gather is that rents will at worst remain static but they may even fall.

The reasons given are generally:

- Currently idle housing stock may be put on the rental market if it cannot be sold so the owner can reduce monthly losses
- Recent purchasers may rent rooms to help with increasing mortgage payments
- There is an oversupply of housing, even if houses currently let are sold, the rental demand will reduce (because someone has to buy) and the oversupply remains in place.

However, I think rents may increase. There will be less buyers and more renters. Even if there is no major shortage of rental supply, many of those renters will be willing to pay higher costs because:

- They will have no desire to buy no matter what the rental costs
- If they were previously homeowners, even vastly inflated rates will seem cheaper than the mortgages they escaped from.


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## daveirl (29 Sep 2006)

I'm in the increase column or at a minimum temporary increase. Take the Estate I live in, somewhere between 70-80% of the houses are now rented. These were practically all owner occupied until they traded up but they held on to the previous residence. If things get tight for these people surely they'll at a minimum attempt to sell up, and that's the key all it takes is all these amateur landlords to attempt to sell up for there to be a lot of people turfed out of their places and thus make rents go up.  It's very hard to call, I can argue either situation fairly easily.


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## thewatcher (29 Sep 2006)

Yep, i think rents are going to increase in the short term.Aera i have an interest in the no. of properties on daft for sale has tripled in 3 months and the no. of rental properties has dropped by 20%.A lot of immigrants in the aera involved in the building game though,so in the long term rents will fall.


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## whizzbang (29 Sep 2006)

thewatcher said:


> Yep, i think rents are going to increase in the short term.Aera i have an interest in the no. of properties on daft for sale has tripled in 3 months and the no. of rental properties has dropped by 20%.A lot of immigrants in the aera involved in the building game though,so in the long term rents will fall.



true, but a lot would be take up by students in September wouldn't they?


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## thewatcher (29 Sep 2006)

whizzbang said:


> true, but a lot would be take up by students in September wouldn't they?


 
Eh no,no college/university in the aera.Aren't most colleges building their own accomodation now anyway,there was a thread somewhere recently saying the student rental market in limerick was in freefall because of the campus accomodation,big tax breaks involved i believe in them.


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## beattie (29 Sep 2006)

thewatcher said:


> Yep, i think rents are going to increase in the short term.Aera i have an interest in the no. of properties on daft for sale has tripled in 3 months and the no. of rental properties has dropped by 20%.A lot of immigrants in the aera involved in the building game though,so in the long term rents will fall.


 
Do you not think that the increase in supply will keep a downward pressure on rents? I can see why rents could go up short term but long term I think they will reduce in real terms. Outside of Dublin (and maybe Galway & Cork) rents have plummeted in recent years. The advent of S50 has caused serious downward pressure across the rest of the market. In 3 years time I think some of these S50's could be open to non-students which will further increase supply. The college population is decreasing all the time so that doesn't help landlords either.


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## thewatcher (29 Sep 2006)

beattie said:


> Do you not think that the increase in supply will keep a downward pressure on rents? I can see why rents could go up short term but long term I think they will reduce in real terms.


 
Not being smart,but is that not exactly what i said.


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## RiceCakes (29 Sep 2006)

Very interested in this topic.

I've been renting since the mid 80's and has been very big changes since then, very very curious to see how things go.

To put in perspective  -

In the late 80's rented a lovely apartment in Clarinda Park in Dun Laoghaire - I paid for this out of my weekly wage as a burger flipper in McDonalds

Made the dumbest move ever (financially) and moved in with friends in Bray in the 90's as a house share for slightly less money. That lasted a few years, but eventually the owner sold and by then, was no longer flipping burgers, and was financially in a much better place - got a nice enough one bed in town for about 2.5 times what I had been paying for the Dun Laoghaire place several years before.

Again landlord sold and had to move a couple of years later (now around 2001), couldn't find a semi decent place for love nor money, original place in Dun Laoghaire way above my price range even though I was earning way above what I had been back then.

Viewed many many places and finally got lucky and found a nice place in Rathgar (small though) where I am today.

Salary has risen by now to the point where I could relatively easily afford the same place in Dun Laoghaire again but for 1200-1400+ per month I just cannot stomach paying that when as a minimum wage burger flipper I could have gotten it before!!

Where rental prices go from here really interests me, possibly up a bit due to many landlords panicking and selling if the market truely starts crashing.

Followed in a few years by the older smarter money snapping up these properties and rents returning back to more realistic/historical values.

Personally while rental prices are still roughly at 2001 levels (in my area of renting - one bed) abeit far far better furnished and cleaner than in those days, I think they were over priced then too compaired to other cities relative to Dublin in size.


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## ninsaga (29 Sep 2006)

I think there is still a level of shortage for good quality rental houses in Cork - just basing it on my observations as well as a couple of people I know are looking to rent in around Cork city right now & find that the rent (for decent houses) are high enough. 

That's my observation but interested in hearing others.

Also with regard to what happens to rents...if investors start bailing out for example it will lead to an even shorter supply & drive rents up in my opinion

ninsaga


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## whathome (29 Sep 2006)

Rental supply will increase and rents will fall because:

- Struggling owner cubs will emigrate or move back in with Mammy and Daddy and attempt to rent out their commuter hellhole to avoid selling it

- Vacant property will be pressed into rental service

- Downturn in construction will cause immigrants to leave, chasing better opportunities

- Continued over-supply in the new homes market will ensure that there are plenty of properties sold at ever lower prices supplying the rental market

- Big drop in demographics coming through over the next few years will result in fewer renters/FTB's competing for property to rent or buy


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## Maine (29 Sep 2006)

whathome said:


> Rental supply will increase and rents will fall because:
> 
> - Struggling owner cubs will emigrate or move back in with Mammy and Daddy and attempt to rent out their commuter hellhole to avoid selling it
> 
> ...


 
Agreed with all. IMO we will construct even in a medium crash an average of 60,000 units per year for next 5 years or enough to house up to 750,000 people. Also alot of the jobs growth in past 5r years is property and public sector ( which is financed by the property sector).

Sellers may not be able to sell at any price and will need income. IMO Landlords currently not bothered to rent due to capital rises will press these properties into service - can boast about not renting now but will look silly if prices are falling and not renting out.


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## liteweight (29 Sep 2006)

whathome said:


> Rental supply will increase and rents will fall because:
> 
> - Struggling owner cubs will emigrate or move back in with Mammy and Daddy and attempt to rent out their commuter hellhole to avoid selling it



Don't believe this will happen as, if FTBs are living in their property for less than five years, and subsequently decide to rent out the property, they are liable for stamp duty clawback at investor's rates. In the majority of cases, this would cost them more than annual rental. They would also be liable to CGT on subsequent sale (if later than 12 mths.).




> - Downturn in construction will cause immigrants to leave, chasing better opportunities



A lot of immigrants also work in the hotel/catering industry etc. so not all are reliant on construction. Having said that, if there is a housing crash, as some predict, all industries will be affected.



> - Continued over-supply in the new homes market will ensure that there are plenty of properties sold at ever lower prices supplying the rental market



As you've already stated, most new homes are going up in commuter "hell holes", although I suspect not everyone who commutes is of that opinion. I don't believe these new properties will have much of an impact, on major cities and towns, with regard to rental. If the general public are sick of the commute and, for one reason or another, decide to sell....why would they want to rent back in commuterland?

For this reason I believe that rents, in the major cities and towns, will increase, while houses in commuterland will remain empty and fail to sell.


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## whathome (29 Sep 2006)

liteweight said:


> Don't believe this will happen as, if FTBs are living in their property for less than five years, and subsequently decide to rent out the property, they are liable for stamp duty clawback at investor's rates. In the majority of cases, this would cost them more than annual rental. They would also be liable to CGT on subsequent sale (if later than 12 mths.)


 
If they have to sell, who's going to buy? FTB's will be holding off, terrified of the collapsing market. Amateur investors might be attracted though, hoping the market has bottomed - increasing rental supply further.



liteweight said:


> For this reason I believe that rents, in the major cities and towns, will increase, while houses in commuterland will remain empty and fail to sell.


 
Agreed that rents in major cities and towns will hold up better than cummuterland but will fall nonetheless.


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## z107 (29 Sep 2006)

To put it simply, in the event of a crash, rent will drop because people will have less money.

Isn't there meant to be a direct relationship between rent and house prices?


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## liteweight (29 Sep 2006)

whathome said:


> If they have to sell, who's going to buy? FTB's will be holding off, terrified of the collapsing market. Amateur investors might be attracted though, hoping the market has bottomed - increasing rental supply further.



I thought you said they'd emigrate or move back in with parents in order to avoid selling? I was just pointing out that it's not really feasible from a financial standpoint.  If the worst happens, they will either have to grin and bear it (if they can), or sell, even if it's at a loss. I think we've a long way to go before the market here falls into negative equity.



> Agreed that rents in major cities and towns will hold up better than cummuterland but will fall nonetheless.



Why so? My reason for believing they will hold up and even rise, is that if more and more people hold off on buying, either because they have been priced out, or want to wait for a 'bargain'....they'll look to rent closer to the city, especially in the better areas. Demand will rise and therefore rents will rise also.

If, as some suggest, investors start to sell off wholescale, their tenants are displaced. If FTBs decide to give up the ghost, they still need somewhere to live and will not choose to rent out in the sticks.


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## Panzraam (29 Sep 2006)

> Isn't there meant to be a direct relationship between rent and house prices?


 
There is meant to be one in every housing market but the Central Bank in its wonderful model of the Irish housing market decided that this fundamental link does not apply in Ireland (on page 8). Their model seems to say (the maths being way beyond me) that it is only interest rates that matter, thus justifying the present bubble. Bunch of geniuses. 

[broken link removed]


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## Duplex (29 Sep 2006)

Panzraam said:


> There is meant to be one in every housing market but the Central Bank in its wonderful model of the Irish housing market decided that this fundamental link does not apply in Ireland (on page 8). Their model seems to say (the maths being way beyond me) that it is only interest rates that matter, thus justifying the present bubble. Bunch of geniuses.
> 
> [broken link removed]


 
Thanks for that, I started reading the prescribed page but when I encountered (quote) 'augmented Dickey Fuller'  I had to revert to my old text books.  And hey I came across a theory called supply and demand seems old hat now.


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## whathome (30 Sep 2006)

liteweight said:


> Why so?


 
The reasons listed above!


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## liteweight (30 Sep 2006)

whathome said:


> The reasons listed above!



I thought these were reasons rents, in general, might fall? What I meant was what is your reason for thinking they will fall in the major cities? If, as you said, FTBs might be forced to sell, and others are not prepared to pay high prices for the privilege of living in commuterland, AND investors start to sell off their properties in the cities.......where are those people who wish to rent going to live? As time goes on I feel they will be willing to pay a premium for living in the city rather than a back breaking mortgage to live in commuterland.


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## whathome (30 Sep 2006)

liteweight said:


> What I meant was what is your reason for thinking they will fall in the major cities?


 
Every reason listed above bar the one that mentions commuterville


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## Duplex (30 Sep 2006)

This data might give an indication of what might happen in Ireland if the bubble bursts.  The supply of rental property has increased as sellers fail to find buyers and inventory builds.  See the third column.


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## Superman (30 Sep 2006)

ninsaga said:


> I think there is still a level of shortage for good quality rental houses in Cork - just basing it on my observations as well as a couple of people I know are looking to rent in around Cork city right now & find that the rent (for decent houses) are high enough.
> 
> That's my observation but interested in hearing others.
> ninsaga



Agreed.  My parents have a couple of rental properties in Cork.  Up to even a year ago rents would have been the same for modern apartments and old properties. (i.e. one could have a truly wonderful apartment in a great location, include pictures of it on Daft etc. so people were aware of it, but if it were more than €50 above the average price, it would not rent).  Now though, rents for new properties are starting to be dictated by those who bought properties in the last year or two. (Since, the building boom in Cork has really taken off in the last 2 years, prices paid for most apartments are 2004/5/6 prices), they are demanding - and perhaps surprisingly enough getting - higher rents.  
Also rents in general have increased significantly this year IMO.  
Here would be my estimate, on city centre apartments:
2005
1 bed: €650
2 bed: €900
3 bed: €1100

2006
1 bed: €750
2 bed (old): €900
2 bed (new): €1100-€1200
3 bed: €1250


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## Dipole (30 Sep 2006)

Drop -
When our economy implodes everyone will have less money in their pockets.  Landlords may have motivations to put up rents but there won't be enough people around able to service higher rents.
Only thing that will help to keep rent prices stable is government intervention through social welfare payments which is already the primary determinant of  what a rental property returns in many areas.


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## liteweight (30 Sep 2006)

Dipole said:


> Drop -
> When our economy implodes everyone will have less money in their pockets.  Landlords may have motivations to put up rents but there won't be enough people around able to service higher rents.
> Only thing that will help to keep rent prices stable is government intervention through social welfare payments which is already the primary determinant of  what a rental property returns in many areas.



Do you think that Banks, Mortgage Brokers, Stockbrokers, the financial sector in general, will trim staff? There are a lot of businesses out there reliant on the property market. That's a given and these usually have the disposable income required to service a high rental market.

On the other hand if so many are now cashing in and believe renting is the more affordable option, then surely demand must rise and after all they do have all that loot made on property!

The Government already have a scheme in operation which might well grow if more and more people come onto their list. I don't think it's geared toward those who may have trousered 50K or more in profit by cashing in a first time property on which they paid no stamp duty.


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## Dipole (30 Sep 2006)

I expect every business that is dependent on the Irish economy will lay people off or reduce their hours or drop all overtime.  There will be much less money in circulation and people get kicked off the demand curve through lack of purchasing power.


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## sunrock (1 Oct 2006)

hi
what happens if in a house prices correction when the price of houses drop 10%,  20% or whatever it is  a large number of mortgage holders ,especially those who bought in the last 1 or2 years,decide to just hand in their keys to the mortgage provider
i mean are there any repercussions?
can the mortgage provider come after them in the case of negative equity or other expenses
if its as simple as handing in the keys im sure even in the case of a 10% reduction in price many thousands would clearly see that to hand in the keys and rent for maybe 500+ a month less than their mortgage would make such a lot of sense
increasing interest rates and hence mortgage payments  and decreasing rents_my opinion in this scenario_would convince any doubters
10% of 300000 is 30000   and for a firsttime buyer no stamp duty _so their buying costs are maybe 5000  so to hand back the keys will save them 25000 on paper
of course the next time they buy they will have to pay stamp duty if the gov dont change the rules but so what
of course the mortgage providers have sold on the debt so they are covered
smiles all around   
to keep on thread our unburdened of his keys ex house owner  now suitably chastined and now a vociferous critic of the madness! of the huge rise in house prices(to which he contributed) that inevitably led to a price reduction,joins the rental market 
of course its not a problem  
allthe repossed houses are of course now pressed into service
i mean there is no reduction in house numbers
people are not as well off with job losses etc so its unlikely rents will increase  may even decrease
appreciate any feedback


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## liteweight (2 Oct 2006)

"Hand back the keys" is a phrase that is bandied about all the time. You can't hand back the keys. I think this has been discussed elsewhere on AAM. The lender does not physically want the keys, they want their money and a certain process is followed which includes taking the apt/house and putting it up for sale. However, while they are waiting for this to happen, the borrower still incurs interests and probably penalties. They also pay for expenses incurred by the lender trying to recoup his money. The above is a simplified version of events but basically, handing back the keys is a non-runner!


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## thewatcher (2 Oct 2006)

I'd agree with that,u can't just "hand back the keys" with no consequence unless you plan to skip the country.You have defaulted on probably the biggest loan in your lifetime,you will have a major black mark against your with every credit institution in the country.To think you can just hand back the keys,rent till prices fall and then get a another mortgage when house prices readajust is just pie in the sky stuff.
In saying that i know people with investment properties where the fundamentals don't stack up,and where the loan is secured on the investment property only.If these people decide to pack up what are the banks going to do then ?and i presume this is the case for a lot of investment mortgages.


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## Maine (2 Oct 2006)

thewatcher said:


> I'd agree with that,u can't just "hand back the keys" with no consequence unless you plan to skip the country.You have defaulted on probably the biggest loan in your lifetime,you will have a major black mark against your with every credit institution in the country.To think you can just hand back the keys,rent till prices fall and then get a another mortgage when house prices readajust is just pie in the sky stuff.
> In saying that i know people with investment properties where the fundamentals don't stack up,and where the loan is secured on the investment property only.If these people decide to pack up what are the banks going to do then ?and i presume this is the case for a lot of investment mortgages.


 
Non national buyers may be alot more happy to hand back the keys and scoot.  This could be a big bogey for the banks as these buyers will not subsidise the payments if their big plan is to go back home.  

I think non nationals have been good for ireland but they do not have the same incentive to protect their credit scores in ireland.  Most irish people would probably do the same if they were living in saying latvia and knew the consequences of jumping ship were slight


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## sunrock (2 Oct 2006)

thanks for shedding light on "handing back the keys" process
i suppose it seems clear the bank have considered this possibility and have a big legal framework in the smallprint to recover all monies due.
nevertheless a mortgage holder who is in negative equity and who could rent a similiar property much cheaper than the mortgage payments_especially if he cant really afford his mortgage payments and if he has no savings_what would happen if he hands back the keys
maybe he has lost his job
can he declare himself bankrupt
can the bank get part of his wages or dole money
can he open a credit union account even
its clear he wont get another mortgage
ofcourse he/she could leave the country like a non national
what draconian powers do the banks have to cover them selves
this could be a serious issue in the event of a downturn
i know in the uk downturn in house prices 1992 many of these "hand back the keys " people got chased up for monies due


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## soma (2 Oct 2006)

sunrock said:


> i know in the uk downturn in house prices 1992 many of these "hand back the keys " people got chased up for monies due



Alot of Irish people still hold a rather naive and IMHO childish view of financial institutions. The fact that large amounts of mortgages have been sold off as mortgage-backed securities, will most certainly (IMO) put to rest the impression of the local friendly bank not wanting to hurt their 'image' by repossessing properties.


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## phoenix_n (2 Oct 2006)

Commuting is going to be the next 'issue' insofar that couples will rather rent than own and commute as by owning(in suburbs) you will not be gaining much financially but you will be losing alot socially. Thus rents in city centre will sky-rocket ( in this market if a stress vendors property went within my price i might consider re-entering) whilst those in outlying areas will depress.


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## delboy159 (2 Oct 2006)

My economics lectures (as much as my drink soaked student brain could remember from long ago) always worked on the premise that in rising interest rates and falling house prices rents would consequently increase. The reasonong behind this was - 
Less houses being built and thus people were more inclined to rent. The a-typical 25 year old couple are buying now (or were 6 months ago) - whereas the a-typical 25 year old couple in a recession will rent.

This will increase the demand on rental property - which should increase rent levels. One would assume there won't be enough "new" rent dwellings as houses aren't being built because we are in a recession

The high IR rates are irrelevant - a landlord can't just turn around and say to a tenant my mortage has gone up by 20% - therefore I'm increasing your rent... The rental market is a seperate supply and demand market...

Supply of renters will increase, thus increasing demand for rental properties. Supply of property will fall due to a building recession.

Also, to answer the valid point on the "massive inventory of unoccupied properties", most of these are in areas where these is no demand - and won't feed into the overall market. Places like Carrick-on-Shannon or towns in the midlands etc. with lots of vacant homes - they will probably feel some sort of rent deflation. But in urban centres - I expect that rents will increase. I am open to contradiction though......

Just saw phoenix_n's 3 lines which essentially says what I'm saying - just better!


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## walk2dewater (2 Oct 2006)

Interesting thread, as a confirmed renter in Ireland, this issue has intrigued me. IMO rents will stay flat or fall.

Why? Bottom line is there is no shortage of places to live in Ireland, either to buy or to rent, either in local markets or generally. We are awash in residential accommodation, and there’s another 100k units coming this year. Sentiment has been blown apart, how can prices rise more now?

Prices for all housing services WERE supported by general and widespread willingness to pay ever higher prices for purchased housing without reference to yield, i.e ‘a speculative mania’. This supports prices from the top to the bottom of the market. Sentiment has changed, i.e. ‘bubble bursts’, soon we will see exactly just how much property there is in this country (lots). We will also see what prices emerge as importance of yield returns and ability to borrow is much reduced (i.e. much lower prices).


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## liteweight (2 Oct 2006)

phoenix_n said:


> Commuting is going to be the next 'issue' insofar that couples will rather rent than own and commute as by owning(in suburbs) you will not be gaining much financially but you will be losing alot socially. Thus rents in city centre will sky-rocket ( in this market if a stress vendors property went within my price i might consider re-entering) whilst those in outlying areas will depress.



This is my view also and I haven't seen a decent argument against it yet.

Sunrock, the lenders will go after everything you own, not just the house! I can't stress this enough. If you want to rent, a landlord will normally look for a reference from the bank and also want you to pay by direct debit/standing order. Bankruptcy is a much more serious step than you seem to imagine. Again some people hold the view that it's a matter of throwing your debts up in the air and saying 'I'm bankrupt....I can't pay'! Banruptcy hold serious repercussions for the bankrupt.

As to foreign nationals, I can see that some might flit, especially those from non EU countries. These are becoming less and less and I think we'll see a future where our lenders have agreements with others in different countries, in the not too distant future.


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## darex (2 Oct 2006)

Basically long term it is very simple:

There will be less people in the country with less money to spend and an ever increasing number of properties so rents will fall. People can leave the country but currently built properties cannot.

However in the short to medium term it is much harder to predict as you have a number of positive and negative factors each playing out on their own timescales:

1) How long will the current increase in population take to turn into a decrease

2) How quickly and by what percentage will average disposible income decrease (or rise more slowly)

3) How many properties effectively taken out of circulation due to transaction periods increasing

4) As the ratio of renters to buyers changes nationally the areas in which people are prepared to live also changes causing location based divergence in rental prices.

5) The current bubble may have distorted the natural ratio of renters to buyers causing medium term transitional effects in rent prices. Again it is anyones guess as to whether this is a positive or negative factor.

My gut feeling is that rents may rise a little in desirable city centre locations for a short while before falling back. In outlying areas rents should fall immediately.


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## Duplex (2 Oct 2006)

The absolutely crucial variable is the migrant population.  I think that we might see a reduction in their number by up to 50% if a sharp economic slowdown is visited upon us.  This might result in an additional 60,00-80,000 rental units hitting the market.


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## phoenix_n (2 Oct 2006)

I can tell you now what i would be doing if i had an apartment to let. Short-term let it. I have been trying to secure a 2 week let on an apartment in Dublin for this month and there is nothing available.


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## Foxtrot (2 Oct 2006)

I think rents here, at least in Dublin, are just crazy - and I lived in San Francisco during the dot.com boom. All of my friends who rent are paying extortionate amounts for dank cupboards. IMHO rents are just as inflated as the housing market.


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## Neffa (2 Oct 2006)

Foxtrot said:


> I think rents here, at least in Dublin, are just crazy - and I lived in San Francisco during the dot.com boom. All of my friends who rent are paying extortionate amounts for dank cupboards. IMHO rents are just as inflated as the housing market.


 
I disagree. Renting here is 30-50% cheaper than London (nice two-bed in most of decent areas in London is 1200-1400 pounds per month, it is 1200-1400 Euro here). For a 4-bed family house, you'd pay 2500-3000 pounds per month in London in a nice area whereas it would be circa 3000 Euro in Dublin.


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## dontaskme (3 Oct 2006)

Superman said:


> Agreed. My parents have a couple of rental properties in Cork. Up to even a year ago rents would have been the same for modern apartments and old properties. (i.e. one could have a truly wonderful apartment in a great location, include pictures of it on Daft etc. so people were aware of it, but if it were more than €50 above the average price, it would not rent). Now though, rents for new properties are starting to be dictated by those who bought properties in the last year or two. (Since, the building boom in Cork has really taken off in the last 2 years, prices paid for most apartments are 2004/5/6 prices), they are demanding - and perhaps surprisingly enough getting - higher rents.
> Also rents in general have increased significantly this year IMO.


I would suggest there is a shortage of good quality rental accommodation to let in Cork anyway. I remember when I started college about 15 years ago, there were *no *custom-built apartment buildings, aside perhaps from some out near the hospital.
During the early to mid 90's a lot of apartments went up near the college and there were some city centre developments as well.
But most rental properties, whether houses or apartments, were targeted at the student market and, well, student accommodation is not necessarily well maintained.
Incidentally, I rent in Germany and I pay less than any of the equivalent properties I see advertised for Cork and that includes heating and waste disposal.
As to whether rental prices would increase or decrease in line with house prices, if investors are buying they probably would prefer to buy a house with a sitting tenant, so just because a housing unit is up for sale does not mean the tenant is bound to be turfed out.


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## ukftb (4 Oct 2006)

Neffa said:


> I disagree. Renting here is 30-50% cheaper than London (nice two-bed in most of decent areas in London is 1200-1400 pounds per month, it is 1200-1400 Euro here). For a 4-bed family house, you'd pay 2500-3000 pounds per month in London in a nice area whereas it would be circa 3000 Euro in Dublin.


 
Agreed if you convert sterling to the Euro, Dublin is cheaper. However I dont think you can compare rents by simply converting sterling to Euros. I think a better comparrison is to compare rents as a proportion of your income. 

The last time I checked (6 months ago) if I was to do the same Job in Dublin as I am in London I'd take a 30% cut in wages as I wouldn’t get the Euro equivalent. In I.T., anyway, 1 pound for 1 euro the wage rates seem to be the same between the two cities, therefore as a proportion on your salary the rents are similiar.


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## Open_Window (14 Oct 2006)

Bad things & Stuff in Irish Rental Market make me MAD 

WOW! Some of those high rental properties are aimed at the corporate client, however I have never seen such a disgusting four poster bed in all my life. I don't get the "four poster bed" appeal.

Few people if any, realise that the four posters are for a canopy which would keep in the heat (along with surrounding curtins on the bes), whiel also to stop the vermon, RATS pissing, ****ting and generally falling on you as they moved in the rafters above yea, Lovely!

I've posted before but regarding how Irish rents are set is intersting, I believe  1 type of landlord is setting the price while the other is following and in fact making the real killing.

*Oldschool landlord *class (those that bought in the 80s or something like that or inherited..)

*Neo-Landlords*, those who got in at varuious point salong the mania upswing.

Now it isthose "NEO-Lords" who are using a very large mortage to purchase the property (secured how, who knows... probably lots of lies to the Bank manager as usual... credit union fiddle for deposit etc etc) and simply using the tenants to service the mortgage, not making anything in real profit that inflation wouldn't be gobbling up.

Now the Old-school landlords (the ones with the big tall hats, usually horse back  ) they see what the markets at and just hike it up. They are making in some cases 100% pure profit on rental income no doubts.

So the NEO Lords stand to loose a lot unless they can stay in the market and thus become Old-school who might decide to get out now since they may have been in it for 20-30 years, or pre 95-97.

There are varying degrees of these types of landlords, anything after 95-97 I think is NEO Landlord territory, after 2001 SUPER-NEO-Landlord

So here is the league,

OSL - Oldschool Landlord, Pre 1995
NL -   Neo Landlord Post 1995
SNL - Super Neo Landlord Post 2001

I would love to know the proportion that would be in this category, I believe some OSL's are also NL's, having had maybe a family home rented since the 80;s then decided to buy a S23 or S50 and so on... I also think the largest proportion in the table ar the NL's and SNL's since the majority of new builds have been in the last 10 years, almost 500,000 it seems.

Well it look like not will homeowners be caught in the chaos but also those who have decided to also enter the higly unregulated & shady Irish rental market that is possibly the largest black economy in the economy after drugs and one of massive tax non compliance.

Lets look at this Agent related listing from daft,

SAMPLE List (uber prices,)

Marked as "Corporate lettings long and short term" on daft, featured agent.

2 Bed, Monkstown    €1500    
2 Bed, Ballsbridge    €1800    
2 Bed, Dun Laoghaire    €2000    
2 Bed, Hanover Quay    €2000    
2 Bed, Foxrock    €2200    
2 Bed, Hanover Quay    €2250    
2 Bed, Stillorgan    €2500    
2 Bed, Foxrock    €2600    
2 Bed, Ballsbridge    €2700    
2 Bed, Foxrock    €4000    
2 Bed, Foxrock    €4000    
3 Bed, Monkstown    €2750    
3 Bed, Ballsbridge    €3500    
3 Bed, Ballsbridge    €3750    
3 Bed, Dun Laoghaire    €4000    
3 Bed, Ballsbridge    €4500    
3 Bed, Foxrock    €8000    
4 Bed, Rathmines    €3500    
4 Bed, Blackrock    €8000    
5 Bed, Dun Laoghaire    €8000    
6 Bed, Ballsbridge    €10000

--- 

Ok I tried to find a smaple list with the more average market prices that us mere mortals would be more concerned with. However this list illustrates the point, the prices are all rounded to the "100". Rather arbitrary, you see it most clearly when you see all the properties listed by once agent, there is little deviation in clasesses, 1 bed all the same price , 2 beds all the same prices....

Price rounding is annoying. I pointed this out also on another thread here I think.

That a lot of agents who mange properties for clients (fools) usually take a fee or sometime to that effect. I know one of the very agents takes the first rent due as a fee, so people are in fact only getting 11 months rental income in the case of in year leases (how this works for four year leases i have no idea).

These guys also engague in the beligerent whitholding of depostis for arrbitrary reason as a matter of policy. I have been there and I am a good tenant, but clean and time vacation is sometimes jsut not enough for these tooks.

Now call me what you want, but would losing 1 month of your rental income to "agents fees" not wipe out any yield?

Seems to me it would if I understand it at all.

Here are the more usual listings

1 BEDS
1 Bed, Terenure    €950
2 BEDS
2 Bed, Blessington    €900
2 Bed, Tallaght    €1150
2 Bed, Bluebell    €1200
2 Bed, Dublin 8    €1200
2 Bed, Knocklyon    €1200
2 Bed, Tallaght    €1200
2 Bed, Inchicore    €1300
2 Bed, Kimmage    €1300
2 Bed, Knocklyon    €1300
2 Bed, Rathfarnham    €1300
2 Bed, Terenure    €1600
2 Bed, Sallins    €3000
3 BEDS
3 Bed, Newbridge    €1150
3 Bed, Lucan    €1200
3 Bed, Naas    €1200
3 Bed, Lucan    €1250
3 Bed, Lucan    €1300
3 Bed, Naas    €1300
3 Bed, Ballyfermot    €1500
3 Bed, Harold's Cross    €2000
4 BEDS
4 Bed, Lucan    €1300
4 Bed, Knocklyon    €1700
4 Bed, Rathfarnham    €3500
5 BEDS
5 Bed, Lucan    €1500
5 Bed, Templeogue    €2200
5 Bed, South Circular Road    €2900
5 Bed, Terenure    €4000

finally,

1 Bed, Rathgar    €550
1 Bed, Ashbourne    €800
1 Bed, Christchurch    €900
1 Bed, Tallaght    €900
1 Bed, Dublin 8    €950
1 Bed, Leixlip    €950
1 Bed, Milltown    €950
1 Bed, Chapelizod    €975
1 Bed, Tallaght    €1000
1 Bed, Castleknock    €1200
2 BEDS
2 Bed, Leighlinbridge    €625
2 Bed, Clondalkin    €1100
2 Bed, Lucan    €1100
2 Bed, Tallaght    €1100
2 Bed, Finglas    €1150
2 Bed, Clonee    €1200
2 Bed, Clonsilla    €1200
2 Bed, East Wall    €1200
2 Bed, Finglas    €1200
2 Bed, Finglas    €1200
2 Bed, Finglas    €1200
2 Bed, Santry    €1200
3 BEDS
3 Bed, Ballyfermot    €1200
3 Bed, Ballyfermot    €1200
3 Bed, Clondalkin    €1200
3 Bed, Maynooth    €1200
3 Bed, Tallaght    €1200
3 Bed, Tallaght    €1200
3 Bed, Finglas    €1250
3 Bed, Killbride    €1250
3 Bed, Lucan    €1250
3 Bed, Tallaght    €1250
3 Bed, Tallaght    €1250
3 Bed, Palmerstown    €1300
4 BEDS
4 Bed, Clonsilla    €1375
4 Bed, Saggart    €1450
4 Bed, Chapelizod    €1500
4 Bed, Leixlip    €1500
4 Bed, Knocklyon    €1700
4 Bed, Drumcondra    €1800
4 Bed, Glasnevin    €1800
4 Bed, Kimmage    €1800
4 Bed, Dublin 8    €2000
4 Bed, North Strand    €2200
4 Bed, Dublin 2    €2800
5 BEDS
5 Bed, Palmerstown    €1500
5 Bed, Maynooth    €1800

I think that illustrates ore point in terms of rounding


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## ajapale (15 Oct 2006)

Open_Window,

Please desist from multiple postings one after the other. I have merged your three posts.
What is the purpose of these tedious lists?

aj

Phoenix_n



> Ok lets post some crazy rents on offer




Please dont. (Room, Bren and Madison I have removed your "crazy rent" links to daft.ie)

aj


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## Open_Window (15 Oct 2006)

Sorrya bout that, I would have put them in colums using html if that was possible? (is it?)

I was trying to show how price rounding is the technique used for rents in Dublin.

There is a unifomiryt to the types of rents demanded on properties that are located in very diverse areas of Dublin, but share say the feature of "2 bedrooms" so all 2 bedrooms hover around the same price, regardless almost of location, size, facilities, furnished or unfurnished (unfurnished is rare, pity...) and other such variables.

Which leads me to believe that everyone is trying to get as much as the market can bare.

There is no reason why rents should be so high in Ireland.

Tennants are a easy target and a large divided minority so they are very much taken advantage. I believe.

I hope that clarifies why rents are so crazily high as somne posters have pointed out.

Rents are at an obviously disproportinate to your tenancy right and quality of life if you took Ireladn as the norm.

To sum it up

Ireland
High rents = poor tennacy rights, small format accomodation, poor furnishing, little unfirnished options.

Rest Of the Universe
Low rent  = good huamne tenancy rights, excellent choise of accomodation accomodation arragnements (co-ops), unfurnished options (in some cases rennovations requested entertained and allowed)


Ireland has a very immature Landlord class, who expect a lot for very very little.


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## Neffa (15 Oct 2006)

ukftb said:


> Agreed if you convert sterling to the Euro, Dublin is cheaper. However I dont think you can compare rents by simply converting sterling to Euros. I think a better comparrison is to compare rents as a proportion of your income.
> 
> The last time I checked (6 months ago) if I was to do the same Job in Dublin as I am in London I'd take a 30% cut in wages as I wouldn’t get the Euro equivalent. In I.T., anyway, 1 pound for 1 euro the wage rates seem to be the same between the two cities, therefore as a proportion on your salary the rents are similiar.


 
Not sure it is anything like 30% difference any more, certainly not in IT. The UK average salary and Irish average salaries are now pretty close (within 5%).


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