As reported by Dan O’Brien in yesterday’s Irish Times, a paper published by the ESRI on the residential property market, based on census data, found large differences in the stock of unoccupied homes in urban and rural areas. The conclusion is that there is likely to an increase in demand to buy houses in urban areas, leading to an increase in prices.
Of greater interest to landlords, is the indication in the report that rents in urban areas will rise as a result of significant net immigration in the period to 2015. Despite what we were led to believe about foreign workers returning home as a result of the downturn and also our own young people leaving Ireland, it appears now that while large numbers of young Irish people emigrated, an even greater number of young foreign nationals came to Ireland, leading to net immigration of 50,000 for the period 2006-2011.
In addition, there has been a dramatic increase in the number of households in private rented accommodation in the 5 years to 2011. This may be as a result of a number of factors, i.e. a move away from the Irish tradition of home-ownership, expectation that house prices will fall further, lack of credit, lack of certainty re employment etc; but the report also concludes that renting is better value than buying, with 32% of households in Dublin city in rented accommodation.
With many landlords being ‘squeezed’ in recent years as a result of falling rental incomes and increased costs as a result of property taxes and other costs, even a small increase in rents has to be good news.