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More headaches for renters as landlords flee the market in greater numbers


Landlords leaving the market is bad news for renters. (Photo posed)

Landlords leaving the market is bad news for renters. (Photo posed)

Landlords leaving the market is bad news for renters. (Photo posed)

Renters face a fresh struggle for accommodation as the flow of landlords from Ireland’s property market has now been transformed into an all-out exodus.

New statistics reveal a full quarter of all Irish family homes sold in the past three months were sold by landlords.

The data contained in the latest quarterly Irish Independent/REA Average House Price Index also shows that house prices were beginning to stabilise at the end of 2021.

Nationwide the average increase in the last quarter was 2.24pc, just half that experienced between June and September as demand eased and the market calmed.

But the survey confirms that small investors are voting with their feet and taking advantage of rising prices overall to exit the market in bigger numbers than ever.

The trend will provide more second-hand homes for private buyers – but also cut the stock of rentals available in the short term. In the long run it will strengthen the market share of big international funds who have been buying up new homes in Ireland, often to the detriment of ordinary home-buyers, as well as adding to rent inflation.

REA’s Barry McDonald said: “Our survey found that 24.2pc of all second-hand house sales in the past quarter have been due to landlords exiting the market. This is a nationwide phenomenon, but is being most keenly felt in the urban areas. With price increases continuing, values are now at an acceptable level for many investors to sell and exit the market.

“It is clear that the changing legislation associated with the residential rental market is becoming a deterrent to non-institutional landlords. There is no doubt that investors leaving the market and selling to owner occupiers will put further pressure on the pool of property available for tenants.”

Meanwhile the other big trend highlighted in the data is a slowdown overall in average house prices hikes.

“There is definitely a calmer market at the end of this year, with less frenzied activity among buyers,” said Mr McDonald. “Throughout the country, agents are reporting a decrease in viewings after a very busy Q2 and Q3.”

While investor properties are adding to supply in urban centres, sale prices in commuter areas saw three times the growth experienced in the major cities.

The price of a three-bedroomed semi-detached house across the country rose by €5,900 over the past three months to €269,963. There was an annual increase of 13pc.

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Selling prices rose in commuter areas (3.34pc) and the country’s large towns (2.57pc) as buyers continue to move out further from the capital in anticipation of long-term remote and hybrid working situations.

Many agents reported a decrease in the price of ‘doer-uppers’ caused by a combination of increased building and labour costs, increasing environmental awareness among buyers and surging home energy costs.

However, despite an ease in price increases and a flood of investment properties coming to market, overall there has also been a shrinkage in supply towards the end of the year in many areas, including Dublin, Wexford and Galway.

“The traditional autumn selling season was strong from the point of view of sales prices and results. However, the supply side that would normally be expected in this period did not materialise,” said Winston Halnon of REA Halnon McKenna, which has branches in all three locations. “This is particularly true for traditional starter homes and properties in urban areas.”

Among those locations which far exceeded the national average increase were the commuter counties around Dublin where hikes of 3.34pc were recorded (over €9,000) in the past three months, taking average three-bed semi prices to €291,944 – with homes selling in just three weeks on average.

Prices in Kildare surged by an average of €17,500 in Q4, with homes now selling in an average of two weeks after coming to market.

The Irish Independent REA Average House Price Survey is based on real sale prices recently achieved for examples of Ireland’s most typical stock home, the three-bed semi, giving an accurate and up-to-date picture of the second-hand property market in towns and cities countrywide. The method provides a more accurate picture than barometers based on asking prices, which are often exceeded or undershot but almost never achieved.

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