Dublin – one of the best kept property secrets in Europe

Dublin – one of the best kept property secrets in Europe
Conor Fitzpatrick

Dublin – one of the best kept property secrets in Europe


Rents keep rising as scarcity of properties to rent persists


A massive surge in home-building is needed to stem the relentless rise in rents, latest rental market analysis shows.


The report says 500 new rental properties need to be built every single week for the next three years in Dublin alone — a total of 80,000 over the period.


Report author Ronan Lyons says the solution is to encourage private developers to build and institutional investors to become landlords.That conflicts with the view of many housing rights advocates that the bulk of new homes should be provided by the State through social housing programmes and by non-profit bodies.


Whatever the solution, the problem is clear — there are too few rental properties available to meet the demand and rents are rising far in excess of general inflation, further limiting the choices of hard-pressed renters.


According to the report, from property website Daft.ie, the average monthly rent being paid nationally is now €1,366 but there is huge variation within that figure as it covers both rural and urban addresses and properties of all sizes.


A family needing to rent a three-bedroom house faces an array of different rents depending on where they need to live.


Dublin will present them with the greatest challenge as homes in that category range in cost from €1,671-€2,210 per month in the county areas and €1,780-€2,623 within the city boundary.


Ireland offers best yield in Europe for buy-to-let landlords


For the third year in a row Ireland has been named the most attractive destination for Europe’s buy-to-let investors. Reasonable property prices, a stable economy and consistent rental demand all add up to make Ireland a very tempting proposition for buy-to-let investors. According to the third annual European Buy-To-Let League Table from WorldFirst, an international payments expert, Ireland is the best destination in Europe for landlords.


Ireland offers an average yield of 7.69%, making it very appealing for investors hoping to maximise rental returns. Hot on its heels is Cyprus, up from 9th place last year to the second slot this time around, while right at the bottom of the table is France, which knocked Sweden off the least-coveted spot.


Ireland’s success is also no doubt helped by the fact that property prices are currently soaring across much of Western Europe. Jeremy Thomson-Cook, chief economist at WorldFirst, says: “Part of the reason for Ireland’s buy-to-let success is while average house prices across the country are on the rise, they still sit some way below the country’s 2008 peak. What’s more, only Malta, Luxembourg and Sweden have experienced higher population growth than Ireland meaning that rental demand continues to go from strength to strength. Add these two factors together and you have a compelling overall proposition for buy-to-let investors”.

  • Market News

    What to expect from the Dublin Property market – Interview with Colin O’Regan, Head of Asset Management

    What to expect from the Dublin Property market – Interview with Colin O’Regan, Head of Asset Management   Why is Dublin witnessing a large increase in investment in the Private Rented Sector?   When you combine high rents with low purchase prices, the ideal conditions are created for investing in property. In Dublin today, you can achieve the highest yield compared to all the other major cities in Europe with the security of knowing that you are investing in an expanding market that will continue to see an increase rents and prices.   What is the typical price of a 2 bedroom apartment in Dublin city centre and how much could it rent for?   Like any major capital city, the price of a property varies according to its quality, size, potential and location. In Dublin city centre, the average price of a 2-bedroom apartment is nearly €330,000 according to the latest data from the Property Price Register. As there is a huge undersupply of all housing in Dublin, especially city centre apartments, it would be possible to achieve rent of at least €2,000 per month with growth over time. This means investors could get an average initial rent of nearly 7% in a major European capital city.   Which are the best areas in Dublin city to invest in for income?   Location, location, location! Spire Capital has identified three expanding areas in the city centre that are delivering the best income returns. These are: Silicon Docks (Hi-Tech Quarter) IFSC (Finance and Banking Quarter) Smithfield and Stoneybatter (Legal Quater)   What are the main factors increasing rental income each year?   Whilst there are many factors affecting rental income the two most important in any functioning property market are Supply and Demand. Following the global financial crisis, the number of new properties added to the Irish housing stock reduced by over 90%. This means that today we do not have enough units to meeting natural demand. Ireland remains one of the few developed countries with a growing indigenous population. When added to this is the large influx of international workers, and their families, needed for the expanding hi-tech and financial services sectors, this has created more and more demand. As a result of this chronic under-supply and massive over-demand, rents will continue to increase in Dublin city centre. Recent data shows that over 60% of under 35’s are now renting in Dublin. Why has there has been a move away from home ownership to the Private Rental Sector?   Traditionally Irish people rented an apartment in the city then saved up to buy a house in the suburbs. Due to high rents it is not possible to rent and save even if they are highly paid. As a result people have decided to rent in high quality city centre locations close to their workplace.   How does Dublin compare with other European capital cities regarding PRS market fundamentals?   There is no doubt that Dublin is expanding economically resulting in a steep increase in rents. However, the rate of increase of property prices is relatively slower. When compared to other European major capital cities, Dublin is in the top 5 of rental costs but is the lowest to buy. This makes it the best PRS market in all major European capital cities.   Apartment prices in Dublin have almost doubled since the bottom of the market in 2012. Is this trend expected to continue for the next 5 years?   Due to the low number of apartments being built in Dublin city centre, the trend for increasing prices is set to continue for the foreseeable future, especially from investors looking for income as a result of high rents.   Are apartments typically rented furnished or unfurnished?   When renting an apartment in Dublin city centre, the apartment is usually rented by the landlord complete with good quality  furnishing, in  line with market expectations.   What is the average time it takes to rent an apartment in Dublin city?   When a tenant cancels a rental contract, they must provide the landlord with a minimum notice period. This means that the unit can then be re-advertised for a new tenant with a move-in date to coincide with the departure of the existing tenant. Due to the huge built-up demand, the time to rent is measured in days not weeks or months.   What asset management services does Spire Capital provide for foreign investors?   Providing international investors with complete Entry-to-Exit asset management services is the cornerstone of our successful business. This leaves the investors in control whilst we maximise their investment return. A important part of our asset management service is tax optimisation, which has always been a very important topic with our existing international investors.  Working closely with expert Irish international tax consultants, Spire Capital can ensure that a tailored Irish tax structure is used to reduce Irish tax leakage.   If you are thinking of investing in property as a source of alternative income, ​ why not contact us today to discuss your requirements in more detail?​ ​ Phone: +353 86 325 0048 I Email: info@spirecapital.ie
    Author: Colin O'Regan
    Read Time: 5 mins