But rents are still low. The average rent nationwide now stands at €830, 27% below the 2007 peak, the figures from property website, Daft.ie show.
In Dublin, rents in some areas are up to 2% higher than a year previously. In Cork and Galway, rents were largely unchanged over the year. In Waterford and Limerick cities, rents fell by between 3% and 4% over the course of 2010.
Outside the main cities, rents continued to decline, falling an average of 3.5% over the year. The total number of properties available to rent nationwide has fallen from a high of over 23,000 in the middle of 2009 to less than 16,000 at the start of February.
‘For any property market, be it sales or rental, urban or rural, the key condition for a levelling off in prices is clearing the overhang on the market. In Dublin’s rental market, and to a lesser extent in those of the other cities around the country, that happened over the course of 2010,’ said Ronan Lyons, economist at Daft.ie.
Across large parts of the country, however, there remains a significant oversupply on the market, which is pushing down rents, he added. ‘All eyes will be on rents in Dublin during 2011, as stable rents could indicate a stabilisation in the labour market and broader economy,’ said Lyons.
The recent economic blows in Ireland may be contributing to fewer people wanting to own property, according to independent economist Lorcan Roche Kelly. ‘Economists have long tried to explain the exceptionally high level of property ownership in Ireland through an historical lens without, for the most part, offering a situation where this cycle might be broken. There is a chance, and this would need decades rather than years worth of data to prove, that the average Irish person may have fallen out of love with home ownership,’ Kelly said.
‘Many have learned the very hard way that capital losses can mount up very quickly and purchasing a house is a decision many have come to regret. There is a chance that people may stop seeing renting as 'dead money' and start to see it for what it is, payment for accommodation, to be treated like payment for any utility, free of worries about such things as European Central Bank interest rates and market confidence.’
He pointed out that with house prices continuing to fall, albeit at slower levels than in previous years, yields on property, in Dublin city at least, are starting to approach investable levels for the first time in a decade.
‘As with all statistics, we need to drill into the figures a bit to get a better idea of the story on the ground. The first thing that jumps out is that the market in Dublin seems to be a little ahead of the market elsewhere, with rents in the capital showing minimal moves during 2010. In the rest of the country, the rental pressure is all to the downside, but not to an extent that should prove worrying at the moment. The smaller prices moves in Dublin are probably due to the size of that market, and the rate at which it can clear, compared to the rest of the country,’ he explained.
'So, it would seem that after six turbulent years (rapidly rising rents cause as many, if different, problems to rapidly falling rents) the Irish rental market may be returning to an even keel. Like everyone else, renters want to have clarity on what their future expenses will be and don't want to feel like they are over-paying for what they have. Reduced volatility in rents will provide reassurance in both cases,’ he added.
