Yields from residential rental properties are up on average over 18% on last year according to national property group, Real Estate Alliance. Recent rental rate reviews don't give a full and accurate view of the rental market the group has reported, based on a survey of its member offices nationwide. While average rental rates are down between 5% , there has been no decrease in certain areas such as Athlone, Killarney and Tralee and yields have improved nationwide.
Average yields for 2008 are at 4.25% up by 15% on last year. In 2007 the group reported average returns at 3.7%, compared with returns of between 2.8% - 3.2% at the end of 2006. Yields this year are as high as 5.4% in areas such as Balbriggan and are at the 5% mark in Ashbourne and Nenagh, according to figures released by Real Estate Alliance. Yields are between 4% and 4.5% in Drogheda, Newbridge, Lucan, Maynooth, Longford, Tipperary, Trim, Cork (Charleville), Callan, Blessington and Tralee. Cavan and Navan are reporting yields of 4.8%.
The greatest increase in yields has been seen in 2 bed apartments across the country with an average increase of 18% versus 11% for 3 bed semis. An increase in percentage figures are as high as 70% in Co. Sligo and at over 40% in Co. Cork and locations such as Carlow, Navan and Carrick-on-Shannon. Ashbourne, Athlone, Balbriggan, Longford and Trim are experiencing increases of over 25% in yields for 2 bed apartments.
Yields for 3 bed semis are on average at 4% this year compared to 3.75% in 2007. Yields are as high as 4.5% in Balbriggan, Maynooth, Baltinglas and Blessington and Nenagh and are between 4 and 4.5% in locations like Lucan, Carrick-on-Shannon, Carlow, Ashbourne, Navan, Tralee and Trim. Yields are between 3.5% and 4% in Sligo, North Donegal, Kells, Kilkenny, Killarney, Athlone, Cavan and Drogheda.
The survey of Real Estate Alliance members around the country noted a shift in the profile of renters with many members reporting a decrease in the number of Eastern Europeans and a rise in the number of Irish people seeking rental accommodation. Two and three bedroom properties are most in demand and in all cases tenants are demanding new well-equipped properties, finished to a high standard. Properties within close proximity to shops, transport and amenities are most desirable, according to Real Estate Alliance.
“Certain areas have undoubtedly seen a flood of rental properties come onto the market in recent months and this has created ‘microcosms’ where rents have been driven down in certain areas. This however is not reflective of the overall rental market around the country. With prices and interest rates having come down significantly there are some good returns to be had on rental properties despite the decreases in rents.”, according to Paul G. Grimes of Real Estate Alliance.
While average rental rates are down between 4% and 5%, there has been no decrease in certain areas. The average monthly rent for a 2 bed apartment is down by 4% across the country. Towns like Ashbourne, Balbriggan, Ballyconnell, Blessington, Carlow Tralee, Trim, Killarney and Athlone and are reporting no change in rental prices for 2 bed apartments. Locations like Baltinglas, Newbridge, Navan are reporting decreases of approximately 5%. Drogheda, Sligo, Nenagh, Lucan and Longford are experiencing decreases of between 6-8%.
Average rental prices for 3 bed semis are experiencing an average decrease of 5% across the country. Again similar locations are reporting no change in monthly rental prices. Newbridge, Kilkenny and Carrigallen in Co. Leitrim are reporting decreases of close to 10% on the monthly rent for a 3 bed semi. Longford’s average monthly rent for a 3 bed semi has decreased from €750 per month to €600 per month. In Co. Sligo, rents for a 3 bed semi are down by 16% in certain locations. (Table below listing comparative rents from 2007 and 2008)
Real Estate Alliance member firms draw on vast experience in offering clients a top class service in residential, commercial, valuations, sales, purchases, lettings, agricultural lands as well as land development for housing sites, acquisitions, planning, zoning and professional consultancy, including rent reviews, arbitrations, CPO’s, lease renewals and appraisals. www.realestatealliance.ie