Booming Airbnb adding to Dublin's rent squeeze
Rental properties are likely to become even more scarce as professional landlords eye up the Airbnb market.
Dublin has experienced a 10pc year-on-year growth in rental values since 2014 and professional investors have worked out that short-term holiday lets could provide bigger returns on their property.
The average rental value of a two-bed apartment in the city centre at €2,000 per month, less a management fee, would equate to the apartment being occupied for just 120 nights of the year through Airbnb.
Investors have confirmed that if correctly managed, the income can be double that of a long-term rental.
It means that tenants are already losing out to tourists who are prepared to pay rates up to three times higher for daily lets.
According to Glenn Burrell of Finnegan Menton, based in the city centre: "Landlords and potential investors are now looking at alternative ways to increase their income. If a property has a central location, the likes of Airbnb can double or even triple their return."
Airbnb has seen huge growth, there are now over 1,700 individual properties listed in the greater Dublin area. The capital hosted 240,000 guests over the last year and there are about 11,000 listings in Ireland.
The listings have been increasing by 100-200pc a year and have started to distort the market.
At the current rate of growth, there could be as many as 3,000 to 4,000 properties listed on the website in 12 months' time.
This trend also has implications for the hospitality sector, where there is an estimated shortage of 5,000 hotel rooms in Dublin.
Airbnb accommodation offers tourists much greater value at prices equivalent to a three- or four-star hotel room.
The Irish tourism sector is booming with numbers up 14pc in 2015, and with the vast majority of visitors from UK, European or American markets that have already embraced the Airbnb concept.
As the cost of the average Dublin hotel room continues to climb, up 20pc to €129 in 2015, it will encourage more individual residential investors to sign up to Airbnb.
It is likely to draw large and small investors back to the market, absorbing potential long-let properties into the tourism sector.
Airbnb, which is just seven years old, is valued at €24bn, which makes it more valuable than Marriott Hotels and just behind the Hilton Group.
An extra incentive for investors is if a residential property is shown to be 'Airbnbable' it is likely to increase in value.
This week properties being advertised include city-centre apartments for €95 and €85 a night located in Christchurch close to popular tourist destinations and night spots.
Other available properties are a log-cabin in Blackrock for €63 a night and a studio over the Olympia Theatre that can sleep three people for €63.
Philip Farrell is a property consultant