The Daft.ie Rental Report - Property Price ReportsThe Daft.ie Rental Report. An analysis of recent...

Introduction by Barry O’Leary, Chief Executive of the IDA

The Daft.ie Rental ReportAn analysis of recent trends in the Irish rental market

2012 Q1

IntroductionBy Barry O’Leary, Chief Executive of the IDA

Stable rental market is good news for Foreign Direct Investment (FDI)

2 | The Daft.ie Rental Report, 2012 Q1

The results of the latest Daft.ie quarterly rental report illustrate how the property market is

finally finding a floor and that is good news for the economy as a whole and for Foreign Direct

Investment (FDI) into this country.

Rents are stabilising nationally and even rising very modestly in some locations like Dublin

and Cork as the sector recovers from a dramatic downward spiral which started in the

latter half of 2007.

Thankfully the trends suggest residential rental prices are stabilising around currently

attractive levels, meaning that gains in competitiveness of recent years will be locked in.

For example taking the country as a whole, rents actually fell slightly (0.7%) in April compared

to the same period in 2011. There is a pronounced urban and rural divide in the latest figures,

with the bigger cities like Dublin and Cork able to command a slight premium over other areas.

It appears that Ireland now has what it didn’t have in the runaway years of the boom - a stable

rental market.

For example the Daft.ie rental index has remained at the same level for the last three months

and it has barely changed since the start of the year. Even the number of properties available

for renting has remained broadly in the same range.

While there is concern among some property owners that rents and prices have not returned

to boom levels, the market emerging from the economic crash appears more sustainable,

which is something the IDA would always welcome.

One of the factors helping to keep prices stable is the flow of FDI which has come into Ireland

during 2011 and in the first four months of this year. The creation of jobs at leading companies

like Eli Lilly, Microsoft, Cisco, Mastercard, PayPal, SAP, Mylan and Amgen creates strong demand

in the private rented sector from employees of these companies.

Many of the staff who work for these leading firms are young and they often prefer to rent

rather than buy, providing a valuable income stream for those who rent out accommodation,

particularly apartments in urban locations.

IDA Ireland is glad to see that Ireland is now very much a value location.

Continued on next page >

Barry O’Leary has been Chief Executive of the IDA since 2008 and has worked for IDA for over 30 years

At the tail end of the boom costs here were becoming prohibitive for some potential FDI clients, but now Ireland is

marketing itself as a value location, not just in terms of property, but also in terms of people costs, energy costs and

infrastructure costs.

Our FDI clients are making huge capital investment decisions in favour of Ireland and we recently calculated that just

10 IDA client companies alone would require over 1.5m square feet, predominantly for manufacturing.

We estimate this will lead to a need for 1,500 construction workers over approximately 2 years. The new buildings are

required for the life sciences, ICT and data centre sectors. This is separate from the take up of office space by other

IDA clients in Ireland in recent times.

Property solutions are integral to Ireland winning its fair share of FDI business, and Ireland gets a very high share of

FDI when one considers the size of the country.

As a result this organisation works closely with bodies like NAMA and the local authorities on designing property

solutions for current FDI investors and potential FDI investors.

For example at a senior level we work closely with NAMA on accessing potential sites for FDI projects.

Clearly companies of global importance who come to Ireland (or who are already here) have specific requirements

for high spec buildings of large scale. The property development and construction industries now face a challenge to

come up with imaginative ways to meet this demand.

After the difficult years of the economic downturn, the property development industry is now hungry again for

growth and expansion. Working closely with partners like IDA, the industry should be able to benefit from the strong

flows of FDI which have come into Ireland in recent times.

Introduction (cont’d)By Barry O’Leary, Chief Executive of the IDA

Stable rental market is good news for Foreign Direct Investment (FDI)

3 | The Daft.ie Rental Report, 2012 Q1 Continued on next page >

Rents in April 0.7% lower on average than a year previouslyTaking the country as a whole, rents fell slightly in the year to April.

The urban-rural gap widens The average rent in Cork and Dublin is up €16 in a year, while outside the main cities it is €14 lower.

Stock available to rent largely static since start of year The total number of rental properties on the market fell slightly between January and April and is at its lowest level since mid-2008.

-15.5

Daft.ie National Rental Index

0.5%The national average rent was 0.5% higher in the first three months of 2012 than in the final quarter of 2011. The average rent in January was €813, compared to a peak of nearly €1,100 in late 2007.


Daft.ie National Rental Index(2007 average = 100)

JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

200298.196.293.294.994.893.492.191.891.089.187.685.7

200795.398.298.8

100.3100.9101.6102.2101.5102.1102.3

97.697.0

200897.699.098.497.899.498.697.897.396.695.994.391.7

85.586.586.787.085.885.385.185.184.883.081.981.4

200381.180.480.280.580.881.282.183.083.583.482.782.4

200482.882.783.683.483.983.884.585.084.986.086.887.9

200587.686.587.087.690.090.991.392.693.994.794.393.9

2006 201076.077.377.076.876.476.576.075.676.175.876.475.4

200989.589.587.985.983.982.781.480.580.279.278.376.7

201175.376.376.076.475.875.675.976.275.875.575.375.6

201275.675.975.975.9

Stock of Properties to Rent (start-of-month) & Flow of New Properties to Rent (during entire month), 2007-2012

Nu

mb

er o

f Pro

per

ties

Stock Out FlowInflow

0

5000

10000

15000

20000

25000

2007 II III IV 2008 II III IV 2009 II III IV 2010 II III IV 2011 II III IV 2012

The index is based on asking rents for properties advertised to let on Daft.ie. Figures are calculated from econometric regressions, which calculate changes in price that are independent of changes in observable measures of quality, such as location, or bedroom number.


Daft.ie Snapshot of RentNationwide

What can I ask for? Can I afford it?Average rents across Ireland, by postcode/region and bedroom number, Quarter 1, 2012

Daft.ie Snapshot of Rents Nationwide 1bed 2bed 3bed 4bed 5bed

Dublin 1Dublin 2Dublin 3Dublin 4Dublin 5Dublin 6Dublin 6WDublin 7Dublin 8Dublin 9Dublin 10Dublin 11Dublin 12Dublin 13Dublin 14Dublin 15Dublin 16Dublin 17Dublin 18Dublin 20Dublin 22Dublin 24North Co DublinSouth Co DublinWest DublinCork CityGalway CityLimerick CityWaterford CityDublin Commuter CountiesWest LeinsterSouth-East LeinsterMunsterConnaught Ulster

€776€940€742€972€722€763€772€682€762€707€722€721€662€803€886€768€834*€893€728€720€747€726€866€725€593€561€453€436€539€399€447€417€390€359

€1,046€1,357€990€1,372€1,029€1,159€1,115€962€1,001€952€872€899€916€1,050€1,160€915€1,133€837€1,126€945€871€894€897€1,193€900€772€723€590€515€670€493€542€518€474€436

€1,388€2,125€1,210€2,096€1,124€1,579€1,300€1,181€1,251€1,142€1,043€1,063€1,071€1,143€1,411€1,030€1,261€1,009€1,348€1,070€976€1,008€1,004€1,503€1,060€845€805€712€649€760€595€623€628€598€562

**€1,506€2,693€1,218€2,429€1,687€1,441€1,538€1,308€776€1,195€1,204€1,362€1,728€1,167€1,512€1,231€1,657€1,275€1,049€1,158€1,227€2,037€1,148€1,016€855€803€729€865€649€685€711€632€610

**€3,097€4,527€1,409€3,345€1,945€1,570€1,449€1,508*€1,413**€2,241€1,327€1,699*€2,150*€1,099€1,286€1,807€3,161€1,420€1,456€1,138€892€732€1,111€747€798€773€692€637

Trends in Rents Across DublinFrom Quarter 1, 2006 to Quarter 1, 2012


Rent-a-room income trends

AreaAverage

rent% Yr/yr change

Averagerent

% Yr/yr change

Dublin City Centre

North Dublin City

South Dublin City

North Co. Dublin

South Co. Dublin

West Co. Dublin

€ 413

€ 324

€ 362

€ 287

€ 375

€ 293

6.2%

0.9%

1.7%

2.9%

5.6%

5.8%

€ 505

€ 402

€ 474

€ 372

€ 454

€ 377

-0.4%

-1.0%

1.5%

-2.4%

2.3%

2.7%

Vacancy3.3

6.3

4.4

8.0

6.1

7.6

Single Room Double Room

Average rents by region, 2006 - 2012

Dublin City Centre North Dublin City South Dublin City North County Dublin South County Dublin West County Dublin

€800

€1,000

€1,200

€1,400

€1,600

€1,800

€2,000

2006Q1

2006Q2

2006Q3

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1

West County DublinAverage rent: €966Year-on-year change: 1.4%Quarter-on-quarter change: 1.1%Change from peak: -27.1%

North County DublinAverage rent: €982Year-on-year change: 0.3%Quarter-on-quarter change: 0.2%Change from peak: -25.8%

Dublin City CentreAverage rent: €1,032Year-on-year change: 2.1%Quarter-on-quarter change: 2.6%Change from peak: -24.0%

North Dublin CityAverage rent: €995Year-on-year change: 0.3%Quarter-on-quarter change: 1.3%Change from peak: -28.9%

South County DublinAverage rent: €1,306Year-on-year change: -0.2%Quarter-on-quarter change: -0.3%Change from peak: -25.6%

South Dublin CityAverage rent: €1,143 Year-on-year change: 2.9%Quarter-on-quarter change: 1.4%Change from peak: -24.9%

The total number of properties available to rent in Dublin on May 1 was 13% lower than a year previously.

The typical cost of a single room has increased by up to 6% in some parts of the city, while double room prices have been more stable.

Elsewhere in the city, rents are roughly unchanged in the last 12 months.

Rents in Dublin city centre, south Dublin city and West Dublin are about 2% higher than a year ago.

Trends in Rents in Other CitiesFrom Quarter 1, 2006 to Quarter 1, 2012


Average Rents by region Other Cities, 2006 - 2012

Cork City Galway City Limerick City Waterford City

€600

€700

€800

€900

€1,000

€1,100

€1,200

2006Q1

2006Q2

2006Q3

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1


AreaAverage

rent% Yr/yr change

Averagerent

% Yr/yr change

Cork City Centre

Cork City Suburbs

Cork Commuter Towns

Galway City Centre

Galway City Suburbs

Limerick City Centre

Limerick City Suburbs

Waterford City Centre

€ 270

€ 249

€ 225

€ 288

€ 252

€ 229

€ 222

€ 229

-4.3%

-4.6%

0.9%

0.0%

-0.8%

2.7%

-5.9%

-0.9%

€ 339

€ 321

€ 305

€ 328

€ 299

€ 275

€ 264

€ 263

-3.1%

-0.9%

0.3%

-0.6%

-2.3%

-2.8%

-2.6%

-4.4%

Vacancy11.9

13.3

13.4

7.8

11.1

13

12.7

18


Cork City

Galway City

Limerick CityWaterford CityAverage rent: €675

Year-on-year change: -1.7%Quarter-on-quarter change: 0.3%Change from peak: -24.6%

Average rent: €617Year-on-year change: -3.6%Quarter-on-quarter change: -2.4%Change from peak: -25.7%


Average rent: €917Year-on-year change: 5.5%Quarter-on-quarter change: 6.0%Change from peak: -17.0%

Cork rents continue to rise and were in early 2012 over 5% higher on average than a year previously.

Rents in Limerick and Waterford cities, however, fell during the same period by 2-4%.

The total number of properties available to rent in Waterford is significantly higher than a year ago, compared to the same or fewer in the other three cities.

While rental rates have increased in Cork, house-sharing rates have fallen by up to 4%, similar to trends in other cities.

Trends in rents-rest of the CountryFrom Quarter 1, 2006 to Quarter 1, 2012


Average Rents by region rest of country, 2006-2012

Dublin Commuter Counties West Leinster South-East Leinster Munster Connaught Ulster

€500

€600

€700

€800

€900

€1,000

€1,100

€1,200

2006Q1

2006Q2

2006Q3

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1


AreaAverage

rent% Yr/Yr change

Averagerent

% Yr/Yr change

Dublin Comm. Counties

West Leinster

South-East Leinster

Munster

Connaught

Ulster

€ 270

€ 225

€ 229

€ 219

€ 228

€ 211

1.8%

6.6%

2.4%

-3.7%

5.2%

7.8%

€ 327

€ 246

€ 271

€ 257

€ 252

€ 241

-0.3%

-2.2%

-2.2%

1.9%

0.6%

6.7%

Vacancy13.5

15.8

15.5

14.4

15.3

14.5


South-East LeinsterAverage rent: €617Year-on-year change: -2.9%Quarter-on-quarter change: -1.2%Change from peak: -25.4%Munster


Connaught Average rent: €554Year-on-year change: -2.7%Quarter-on-quarter change: -1.5%Change from peak: -22.4%

UlsterAverage rent: €528Year-on-year change: -3.3%Quarter-on-quarter change: -1.7%Change from peak: -25.2%

West LeinsterAverage rent: €555Year-on-year change: -2.1%Quarter-on-quarter change: -0.6% Change from peak: -26.0%

Dublin CommuterCountiesAverage rent: €771Year-on-year change: -0.9%Quarter-on-quarter change: -0.2%Change from peak: -29.6%

The cost of a single room has typically risen in most parts of the country, while double-room costs are stable.

Rents outside the cities have fallen by between 1% and 3% in the last twelve months.

The smallest fall was in Dublin’s commuter counties, while the largest fall was in the three Ulster counties.

In Dublin’s commuter counties and in the Midland counties, the number of properties available to rent has fallen 10-15% in the last year. Elsewhere, it is largely unchanged.

First Time Buyer and Investor Information

Can we afford it?The mortgage cost, including mortgage interest relief and income from the rent-a-room scheme, by region and bedroom number.


Investor Information: Snapshot of gross yields across the country (and year on year change, in percentage points)

Location \ Bedroom # AverageYr/yr

change 1-bed 2-bed 3-bed 4-bed 5-bed

Dublin City Centre

North Dublin City

South Dublin City

North Dublin County

South Dublin County

West Dublin County

Dublin Commuter Counties

West Leinster

South-East Leinster

Munster

Cork City

Limerick City

Waterford City

Connaught/Ulster

Galway City

Average

7.4%

6.0%

6.2%

5.6%

5.1%

6.7%

5.2%

5.2%

5.2%

4.7%

5.8%

5.3%

6.2%

4.9%

5.4%

5.1%

1.5%

1.3%

1.4%

1.0%

0.9%

1.5%

0.8%

1.0%

1.0%

0.8%

1.4%

0.7%

1.7%

0.7%

0.9%

0.9%

7.2%

7.2%

7.2%

7.3%

6.8%

6.6%

6.8%

6.2%

8.1%

5.4%

9.5%

5.6%

8.8%

5.3%

5.1%

6.5%

0.4%

1.6%

1.2%

2.2%

1.4%

-1.7%

0.8%

2.5%

2.3%

0.3%

4.3%

-0.4%

1.1%

0.5%

-1.2%

1.1%

7.3%

6.9%

6.8%

6.8%

5.6%

8.5%

6.5%

6.7%

6.9%

6.1%

7.4%

7.0%

7.5%

6.3%

6.2%

6.6%

0.8%

1.2%

1.1%

1.2%

0.7%

2.3%

0.9%

1.2%

1.0%

1.0%

1.3%

1.8%

1.0%

1.0%

1.3%

1.1%

8.5%

5.8%

6.2%

5.9%

5.3%

6.8%

5.6%

6.3%

5.8%

5.3%

5.9%

5.5%

6.8%

5.8%

6.1%

5.8%

0.3%

0.8%

1.0%

0.8%

0.5%

1.4%

0.7%

1.2%

0.9%

0.8%

1.2%

0.6%

1.5%

0.8%

1.4%

0.9%

*

4.4%

5.0%

3.7%

4.3%

4.9%

4.1%

4.4%

4.3%

3.8%

4.4%

4.5%

4.9%

4.4%

5.5%

4.2%

*

0.5%

0.8%

0.1%

0.1%

0.5%

0.4%

0.7%

0.5%

0.4%

0.5%

0.5%

1.3%

0.6%

1.3%

0.5%

*

4.1%

4.2%

3.8%

3.5%

3.6%

4.0%

3.6%

3.8%

3.4%

5.3%

2.8%

3.9%

3.9%

2.6%

3.7%

*

0.0%

1.2%

-0.2%

-0.6%

0.5%

0.5%

0.0%

0.5%

0.4%

1.7%

-1.8%

1.3%

0.5%

-0.7%

0.4%

Yr/yr change

Yr/yr change

Yr/yr change

Yr/yr change

Yr/yr change

First-time buyer information: Rent-a-room income and net loan burden

Location \ Bedroom #

Single room

Double room

1-bed, no letting

2-bed, no letting

3-bed, no letting

4-bed, no letting

2-bed, letting 1 double


3-bed, letting 1 double and 1 single

Dublin City CentreNorth Dublin CitySouth Dublin CityNorth Dublin CountySouth Dublin CountyWest Dublin CountyDublin Commuter CountiesWest LeinsterSouth-East LeinsterMunsterCork CityLimerick CityWaterford CityConnaught/UlsterGalway City

€413€324€362€287€375€293€270€225€229€219€248€226€229€219€270

€505€402€474€372€454€377€327€246€271€257€322€270€263€247€314

€440€363€404€377€455€408€293€233€197€282€232€303€182€264€400

€546€497€592€479€721€391€379€269€289€310€380€469€251€280€440

€41€95€118€107€267€14€52€23€18€53€58€199-€12€33€126

€627€693€825€627€822€553€497€343€389€435€525€640€350€380€506

€122€291€351€255€368€176€171€97€118€178€204€370€87€133€192

-€291-€33-€11-€32-€7-€117-€99-€127-€111-€41-€44€145-€142-€86-€78


4-bed, letting 1 double and 1 single

*€1,083€1,296€1,172€1,472€877€780€535€581€675€821€1,173€539€533€611

*€681€822€800€1,018€500€453€289€310€418€499€904€276€287€297

*€357€460€513€643€207€184€64€81€199€251€678€47€67€27

Mortgage repayments are based on the following application: 30 years, 3.5% variable mortgage, 90% LTV, 25% mortgage interest relief (joint application)

About the Report

Over the last 10 years, Daft.ie has collected a vast amount of data on the Irish property market. In 2009 alone, more than 300,000 properties were advertised on the site.

The goal of the Daft Report is to use this information to help all actors in the property market make informed decisions about buying and selling. In addition, because it is freely available, the Daft Report can help inform the media, the general public and policymakers about the latest developments in the property market. The Daft.ie Rental Report was launched in 2005. It has already become the definitive barometer of the Irish rental market and is being used by the Central Bank, mortgage institutions, financial analysts and the general public alike. Since its introduction at the start of 2006, the Daft.ie Asking Price Index is also being recognised as the earliest available reliable indicator of developments in house prices in Ireland. This is the Daft.ie Rental Report, the partner to the Daft.ie House Price Report issued last month. Together, they give house-hunters and investors more information to help them make their decisions. These twin reports mean that Daft is the only objective monitor of trends in both rental and sales markets on a monthly basis, making the report an essential barometer for anyone with an interest in the Irish property market. Methodology and Sample SizeThe statistics are based on properties advertised on Daft.ie for a given period. The regressions used are hedonic price regressions, accounting for all available and measurable attributes of properties and only coefficients with a very high degree of statistical significance (p < 0.001) are used. The average monthly sample size for lettings properties is over 10,000. Indices are based on standard methods, holding the mix of characteristics constant, with the annual average of 2007 used as the base. A working paper on the methodologies employed in both rental and sales markets is planned for publication.

About Daft.ieDaft Media Group runs daft.ie, Ireland’s largest property website. The latest audited report from ABC (September 2011), shows monthly traffic of 130 million page impressions (pages of information received) and 1.976 million unique users, across Daft Media’s property websites: daft.ie, rent.ie, let.ie and property.ie. The snapshot on page 5 covers the period from February to April 2012. Snapshots are a highly generalised view of the market. They should only be used as an indicator of house prices and not as a definitive guide as there are many factors not included above that affect prices.

CirculationWe are pleased to announce that the average readership of the 2011 reports was over 110,000 people.


DisclaimerThe Daft.ie Report is prepared from information that we believe is collated with care, but we do not make any statement as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the indices, snapshots or analysis at any time for regulatory or other reasons. Persons seeking to place reliance on any information contained in this report for their own or third party commercial purposes do so at their own risk.

CreditsEconomic Analysis:Ronan Lyons Data Compilation:Deirdre Ni Chuilleaneain Marketing & Communications: Kieran Harte

Layout and Design:Ciara Mulvany, Derek Jones Flavour 9 Design

All data is Copyright © Daft Media Limited. The information contained in this report may only be reproduced if the source is clearly credited. Please contact Daft.ie on 01-6795040 for further information.

Coming Next…

The Daft.ie House Price Report 2012 Q2In early July, 2012 The Daft.ie House Price Report will be published in early July 2012 and will provide a county-by-county review of the latest trends in the housing market as well as all the usual indices, snapshots, trends and regional analysis, providing the public with Ireland’s most up-to-date information on the housing market.

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