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High-fliers shun one-bed flats over lack of work space

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Estate agent Owen Reilly

Estate agent Owen Reilly

Estate agent Owen Reilly

One-bedroom apartments have become a no-go for Dublin Dockland dwellers with renters avoiding them in their droves during the work-from-home rules.

The exodus of workers from the high-rent hub during the pandemic led to a fall in residential rents that could continue during 2021 as uncertainty continues over reopening dates for large employers.

Average rents dropped 13pc since last March as workers were sent home, with high-end apartments falling further, but the fall was greatest for one-bedroom apartments.

Owen Reilly, an estate agent specialising in the area, said couples were shunning smaller apartments as there was no space for them to work.

His highest-earning tenants weren't just looking for an extra bedroom but wanted an escape from the Docklands completely to somewhere they could have a garden.

Between March and April last year, just weeks into the first lockdown, 10pc of Mr Reilly's tenants ended their tenancy prematurely and left the area.

He said the majority were from abroad and left Ireland completely to work from their home country, mainly in continental Europe.

That response, and the almost complete collapse of the short-term rental market, has caused a shake-up and it is not yet clear when things will begin to stabilise again.

There was no lack of interest among renters in the area, however, as many saw an opportunity to live in a location previously too expensive.

It is still not a bargain location. Properties rented through Mr Reilly's agency cost on average €2,312 a month, just 7pc below 2019.

The expansion of companies such as Amazon, TikTok and Salesforce drove interest in the area too.

Demand also surged in the last few months of the year with workers preparing to come back to the office in the new year, although the fresh lockdown has postponed the return for many.

Mr Reilly said, however, that landlords would have to be aware that the market was more competitive and consider inducements to attract tenants, at least until the large-scale return to offices begins.

While the rental market has been bumpy, the sales market remained quite solid although the composition of buyers changed significantly.

First-time buyers made up 57pc of all buyers during the year while investor buyers fell from 47pc to 26pc.

In March and April, close to 60pc of Mr Reilly's sales fell through, almost all of them because investors pulled out.

Workforce

Another indicator that the balance between investor and owner-occupier shifted is that 57pc of his buyers required a mortgage, an increase of 26pc on 2019.

First-timers pushed prices for properties in the under-€400,000 category up 2pc while prices in the €500,000-€700,000 category fell 4pc. Beyond that, Mr Reilly had only a handful of transactions.

The appetite to buy remains strong, as indicated by the fact that selling prices in the second half of 2020 were on average 3.3pc above asking price.

Docklands was preparing for an explosion in activity prior to Covid with the workforce expected to double within a few years.

Mr Reilly said he expected those factors would still remain influences in the area.


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