The ongoing exit of small landlords from the Dublin rental market is likely to deepen the city's accommodation crisis, leading estate agent Owen Reilly has warned.
The company, which specialises in city centre and dockland sales and lettings, said small landlords accounted for more than 60 per cent of its sellers in 2021.
“With rental demand back to pre-pandemic levels, this depletion in rental accommodation will deepen the accommodation crisis in Dublin before the anticipated reopening of offices next year,” it said.
Traditional buy-to-let investors are said to be exiting the market at a rate of almost two to one on foot of greater tax liabilities and the imposition of greater rent controls.
This is aggravating the current supply shortfall and driving up rents. According to data from the Residential Tenancies Board, the number of tenancies nationally fell by nearly 22,000 between 2016 and 2020.
In its end-of-year report, Owen Reilly said 2021 had been a rollercoaster year for the agency, with transactions down 40 per cent as a result of a curb on in-house viewings at the start of 2021.
“The welcome return of in-house viewings in April led to the unleashing of pent-up demand that had built up since the end of last year, at the exact moment there was a historically low supply of property for sale,” it said.
Seller’s market
This mismatch between supply and demand created a seller’s market with average selling prices 7 per cent above asking, it said.
The estate agent, which was established in 2008 and has three branches in Dublin, noted that at the upper end of the market, some houses in turn-key condition were selling for 20 per cent above asking and often in a matter of weeks.
“This demand was driven by the desire for more space; Irish families returning home from overseas, their return accelerated by the pandemic; non-Irish technology executives buying instead of renting; and early inheritance, where parents are providing their children with large deposits so they can bridge the affordability gap,” it said.
It also highlighted a new trend in the market, with wealthy Irish families buying second homes in Dublin accounting for more than 20 per cent of its buyers. “More than half our buyers required no mortgage funding whatsoever,” it said.
Overall, it said demand was strongest for properties up to €400,000 in value and at the luxury end of the market.
Prices will rise next year, it says, but how much will be dictated by how the pandemic is managed, interest rates and the supply of properties coming to market.
