The beginning of 2013 got off to a strong start for Ireland’s residential lettings market, particularly in Dublin city, according to property consultants Savills Ireland. With unprecedented demand for rental property, the experts say that rents have really started to ratchet-up in many areas and that this pace looks set to continue.

Savills say rents in most parts of Dublin are now between 2 % & 4% higher than they were a year ago with some developments seeing increases of up to 8% year on year, while Savills Cork report a similar trend with rents having increased c.5% in the greater Cork area.

According to Clarie Neary of Savills Ireland, “We’ve seen a higher rise in rents in the last month than at any time in the past 5 years and 2013 is likely to see rents continue to rise in prime areas of Dublin. The shortage of properties is exacerbating the problem and we believe that while many people are reluctant to buy, rents will continue to push up even further in these high demand areas.

Landlords have added up to 8% on rents on some schemes and we’ve had no difficult in renting them out to good quality tenants. Figures from Daft.ie show clearly the growth of Ireland’s rental market over the last few years - in Dublin 2012 there was 4,200 rental properties on the market compared to 5,400 in 2011 and 6,500 in 2009. On Nov 01st there were just 2,200 properties available in Dublin to rent.  

The number of properties available to rent outside the main cities on November 01st was just under 9,800 compared to 11,200 a year previously. Rental inflation should ultimately persuade more people to make the decision to buy and this is a trend that we see happening during 2013 and 2014”. 

Catherine McAuliffe, Director, Savills Ireland Cork branch, “Popular areas such as the city centre and Douglas have experienced substantial increases in activity over recent months, particularly for new apartments. We put a complex on the market just last week and we had approximately 30 viewings within the first 2days of marketing”.  

Savills contend that employment opportunities have a lot to do with the high uptake of rental properties in areas such Dublin & Cork city. 

Clarie went on to say, “Corporate lettings are strong in Dublin and are snapping up many of the prime locations. Tenant selection is also key to achieving good rents at the moment. Other factors contributing to the increase in rents are the fact that many families are choosing to rent instead of purchasing; those who would like to buy are unable to secure finance; and those who have quality lets in good areas are loath to move”.

Catherine commented, “Most of the activity in the rental market we are seeing at the moment is certainly linked to young professional couples who are choosing to rent rather than buy a property.  Accessibility to workplaces and the City centre, convenient local amenities and still very affordable rents are drivers behind this decision. For the remainder of the year we believe that an increased demand coupled with a lack of good quality accommodation will certainly encourage rents upwards. It will be interesting to see if this will push dwellers into making the decision to buy”.

Savills say that landlords are increasing rents now because they can find tenants to rent at higher prices… however the property experts say there’s no telling what the landscape of the rental market will look like this time next year – it may well have changed significantly if the banks open up their lending again & those looking to buy leave the rental market for good.