Tenants set to benefit from 20% rent saving - report

TENANTS BENEFITED from a 12 per cent fall in rents last year and can expect a further decline of up to 20 per cent in 2009, according to property website Daft.ie.

The latest Daft rental report shows that the average rent nationally is €885, down from €1,000 a year ago. Roughly half of this decline was recorded in the final quarter of 2008.

Ronan Lyons, economist with Daft.ie, expects that there will be further downward adjustment of between 15 per cent and 20 per cent in the year ahead.

The market was “flooded” with rental properties in 2008, he said. The total number of properties available to rent at the moment is more than 20,000, twice the level of early 2008. At the same time, many people who had been renting have left the country. “This means there’s less demand but a greater supply – that has a big impact on rents,” he said.

“The latest figures from this report suggest that the average person renting could pay € 1,600 less this year.”

The report found that landlords in south Co Dublin have been hardest hit by dwindling rents. The average rent in the area fell by 15 per cent last year to €1,386.

Rents in Dublin’s commuter counties were also badly affected, falling by almost 10 per cent in 2008 to €826, with most of this fall occurring in the final quarter of the year.

The fall in rents was not confined to Dublin and its surrounding areas. Cork city has also been affected – average rents fell by 10 per cent over the last year and are now close to €900. In Limerick average rents have fallen below €800 for the first time since late 2006.

Outside the major cities, the average decline in rents was 8 per cent.

Commenting on the report, Gerard O’Neill of Amárach Consulting said the Government’s plan to increase taxes on individuals who own second homes could have unforeseen consequences such as forcing them to rent such properties or sell them “for whatever they can get”.

“Expect falling rental prices and falling house prices to follow,” he predicted.