Outlook

9 LISNEY | REVIEW 2015 & OUTLOOK 2016 DUBLIN RESIDENTIAL LETTINGS
LEFT:
Shieling Square
Howth Road, Raheny – 27 apartments
leased in the scheme since November 2015.
RENTAL
MARKET
The demand for rental
properties in Dublin
was unrelenting in
2015. With supply at
exceptionally low levels
and rents continuing
to rise, the market was
very challenging for
those wishing to rent
accommodation.
PRTB DUBLIN RENT INDEX
110
105
100
95
90
85
80
75
70
65
60
All House Apartment
Q3 2007
Q1 2008
Q3 2008
Q1 2009
Q3 2009
Q1 2010
Q3 2010
Q1 2011
Q3 2011
Q1 2012
Q3 2012
Q1 2013
Q3 2013
Q1 2014
Q3 2014
Q1 2015
Q3 2015
Source: Private Residential Tenancies Board
The latest rental index by the PRTB shows
that Dublin rents grew by 8.7% over
the 12 months to the end of September
2015 with houses rising by 9.3% and
apartments by 8.3%. This means that
Dublin rents are just 2.3% below 2007
levels and have risen by 32.3% since 2011
when they were at their lowest levels.
In terms of supply, Daft.ie data show
that the number of available rental
properties in Dublin remained at low
levels throughout the year, at between
1,500 and 1,800 at any given time. This
compares unfavourably to five years
previous when the average supply was
close to 6,000 units. This undersupply
is due to increasing demand (growing
population and future purchasers renting
for longer) and from our experience, the
falling number of landlords in the market.
In a bid to protect tenants in the private
rental sector from rapidly rising rents,
the government introduced a number
of measures in early November. Notably,
landlords will now only be able to increase
the rent every two years rather than
annually and tenants must be given 90
days’ notice of any uplifts. As part of
this, landlords must provide the tenants
with details of three comparable lettings,
i.e. similar rent levels in place for similar
unit types in the area. While the impact
of this has yet to be seen (Q4 PRTB
rental data not yet released), it may be
the case that the 24 month rent freeze
will lead to some loading of rents as
landlords look to build in some growth,
and while supply is short, this is going
to be difficult to avoid. However, it has
been stated that the restriction will only
last for four years and then the legislation
will cease. This means that by 2020,
landlords will be in a position to once
again review rents as often as the lease
contract allows. In terms of the 90 days’
notice, it is almost treble existing periods
but it is not a major cause for concern.
Where some issues may arise, particularly
for small scale private investors with one
or two properties (as opposed to larger
investors with hundreds of units), is in
sourcing comparable lettings. Landlords
currently rely on prevailing quoted rents
listed on property portals such as Daft
and MyHome as the basis for calculating
market rates. This is because there is
no publically accessible database of
residential lettings. Consequently, it
will be very difficult for investors to get
full information of lettings to provide
the required three comparisons. In this
regard, the PRTB currently produces a
register of all tenancies with the address,
house type, number of bedrooms and
the floor space, but no rental levels are
listed. Searching this register is very
cumbersome and it is not user friendly.
But it can and should be improved so
that landlords and tenants will have
reliable data to base any rent review on.
BELOW:
2 Charleston Road
Ranelagh, Dublin 6
Sold for ¤880,000
ABOVE:
96 Rathfarnham Road
Terenure, Dublin 6
Sold for ¤950,000
Measures relating to the termination of
a lease were also announced. Where
landlords wish to terminate a lease so
that they can either sell the property