Lack of stock driving up prices in rental market

A lot of focus in the last few weeks has centered around the increase in property prices and the anticipated continued growth they will see in 2014.

However, the shortage of stock that is driving up property prices – particularly in Dublin and other urban areas – is also having an effect on the rental market.

In Dublin, for example, there have only been around 1,500 properties available to rent in recent months. When you factor in what areas a person wants to live in, what they can afford, how many bedrooms they need etc, the number of places people have to choose from dwindles very quickly.

That, coupled with the fact that there are only around 3,000 properties for sale in the capital means that there are easily less than 5,000 available properties – whether they be for sale or to let – in the city.

We’ve all heard the stories from estate agents about the huge crowds attending open viewings each week but when it comes to the rental market, it is a much more cutthroat affair.

Whereas a house for sale may take several weeks or even months to sell, a quality rental can be gone in days or even hours.

Those in the market for a new place at present, or those who have been looking in recent months, will identify with stories of meeting the same sets of people at different viewings as the scramble for a place heats up.

As much as property prices might be rising, this demand has also led to an increase in rent.

Indeed, this has pushed many people out of the market to a certain extent with housing charity Threshold reporting earlier this week that it had received double the amount of referrals last year to its homeless support service in Dublin as a result.

Threshold said a shortage of rental accommodation, an increase in rents and cuts to welfare payments and rent supplements were making it difficult for those on low incomes to find suitable and affordable housing in the capital.

There are similar problems around the country where the social housing list far exceeds the number of social houses available.

Unfortunately the problem may get worse before it gets better. The continued demand will undoubtedly drive prices upwards, not to mention a full property tax this year and water charges next year.

To make matters worse, the buy-to-let market is more or less gone and many amateur landlords are either risking repossession or looking to get out of the market altogether.

There may be a silver lining to all this in that a number of new developments are in the pipeline at present that will be rented, rather than sold. Many of these are expected to come on stream in the next few months.

Until then, it is fair to say that many of the problems facing the residential sales market will continued to be mirrored in the rental market.

5 Comments

  1. ALEC
    Posted 24 Jan at 2:53 pm | Permalink

    Plain an simply anyone that thinks they are entitled to live in Dublin can go hell and move further away. I could not afford to buy in Dublin where my Family are from and I grew up so guess what I bought outside Dublin. People seem to think it is a god given right that they will be able to live in Dublin. And if they cant afford to find a rental or buying property then they should get it free from the council.
    They can have a place on the car ferry at Dublin port that will sail out to see and good ridens.
    There is an idea that has been suggested by other people that if there is a housing shortage, well there is plenty of ghost estates, etc that people can move into. Because No-one in this once Great Country should think they are any better than their neighbour but those days are gone as your neighbour would stab ya in back as quick as help you. Well better go before I say something i shouldnt or upsets someone.

  2. Posted 24 Jan at 3:33 pm | Permalink

    maybe Nama are not selling these properties to bring house prices up in the Dublin area.

  3. Posted 24 Jan at 5:53 pm | Permalink

    hi ive been looking with no avail,up until a week ago 4 a room,that takes rent allowance. ive a question for your team y the lack of places. and the queues for a room,never felt comforble viewing that way.i dont knw how the rest of people fell. its a landlord market now cut throat bad way to be, rant over thanks….

  4. James
    Posted 24 Jan at 7:48 pm | Permalink

    Jeeze Alec, you must have got out of the wrong side of bed this morning. Chill out.

  5. Wait and see
    Posted 24 Jan at 9:10 pm | Permalink

    There are huge amounts of properties being rented out by NAMA and if these were to be released on the market it would ease the price bubble which is taking place around Dublin. It is my beliefs that they, hence the Government, are driving up the residential property prices by holding on to these properties and releasing some on a drip basis, thus causing long queues for viewings.

    Take Elm Park on the Merrion Road for example – they should release the lot of them for sale!

    It is also to be remembered the almost 50 per cent of buyers are cash buyers and this market will inevitably dry

    I am also convinced that a lot of estate agents are making up bids and telling porkies to buyers, hence again driving up prices.

    So, people should not be too keen to rush into buying

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