Rental crisis gets worse as exodus of landlords spreads to rural towns

TheIrish Independent’s annual How Much Is Your House Worth? survey for 2023 analyses in detail what is going on in 64 regional property micro-markets.

It shows the problem of departing landlords has extended to regional towns outside rental pressure zones.

Departing investors are now accounting for between 30pc and 50pc of properties coming up for sale not just in cities but in nearly all regional towns nationwide.

Only one county, Monaghan, reports an increase in investors buying property.

It was largely believed landlords getting out of property was a phenomenon experienced only in larger cities, such as Dublin, Cork, Galway and Limerick.

However, in Carlow, estate agents are estimating that investors trying to sell their rentals have accounted for half of all the property that went up for sale over the past 12 months.

Agents in Laois are reporting a rental crisis as landlords bail out of towns, while those in Tipperary say landlords selling up account for a fifth of properties for sale.

Despite the perception the rental crisis is largely a Dublin problem, it has emerged other locations are experiencing a more severe shortage.

In Limerick city and suburbs, there were only 13 properties available to rent on the snapshot day of the survey last month.

Local agents report that on some weeks the number is as low as three.

The landlord departure was one of the reasons house price inflation has been almost halved from an average of 10pc a year ago to 6pc this week.

The survey, published today with theIrish Independent, allows homeowners all over Ireland to value their properties at current market rates.

It shows that two counties, Kilkenny and Westmeath, experienced zero change in values over 12 months.

At the same time, many property types all over the country saw their values remain static – and in some cases fall.

While landlords were selling their apartments in numbers, first-time buyers were not as eager to acquire them as in the past, given the news that more than 100,000 Celtic Tiger era apartments are estimated to have fire defects, structural issues or water ingress damage.

Where landlords were rapidly selling houses, however, buyers snapped them up.

Other factors that helped cool property price inflation for second-hand homes included increasing costs of building work and materials.

The opinions of more than 70 estate agents also reflect a value gap opening in many locations (as high as 12pc) between efficient A- and B-rated homes for BER and those with a C rating or lower.

Increasing interest rates along with home heating and the cost of living generally also contributed to a cooling in appetite for property.

Estate agents reported that where they had six or seven bidders for each property early last year, by the end of the year that was down to two or three.

There has been a significant cooling in the so-called Covid property surge.

This saw many city workers relocate to other regions through 2021 and early last year.

As a result, last year’s report showed nine markets out of 64 with increases of 15pc or higher. This year there are only two.

The place with the highest price increase over the last 12 months was the county area of Galway, which saw prices move up 22pc to €245,000.

Despite the increase, house types remain relatively affordable compared with the Galway city average of €355,000.

Not surprisingly, it is the lower-priced counties that are seeing the strongest price inflation, such as Cavan (up 15pc), Cork east (up 12pc), Roscommon (up 11pc), Mayo (up 11pc) and Donegal and Monaghan (up 10pc).

In contrast, most of Dublin’s postcodes are seeing property inflation running below the 6pc national average.

Not surprisingly, the capital’s most expensive locations (Dublin 4, Dublin 6, Dublin 8 and Dublin 15) saw 12-month increases running below 4pc.

With economic pressures rising, many local experts are predicting zero price growth this year, including those in Kilkenny, Meath, Westmeath, Wexford, Limerick (excluding the city), Roscommon and Cavan.

Most local experts are predicting a halving of inflation again this year to around 3pc.

How Much Is Your House Worth? 2023, provides an in-depth analysis of moving prices for almost all home types in 64 micro-markets showing increases through the last 12 months and local experts’ predictions on values for the year ahead