Are we facing a rental crash?

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Sunny

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Statistical evidence:

Fact: GDP (and GNP) fell in Q4 2007
Fact: monthly indicators of activity in: manufacturing, services and construction sectors unambiguously show falling activity January-March (i.e. flaling output in Q1 2008).

What other conclusion can one reach? Q1 2008 will show falling GDP/GNP again.

What are you talking about? Falling GDP growth does not mean a recession. It means the economy is slowing. You cannot be in a recession with positive growth and GDP growth in Q4 2007 was 3.5%. If that means a recession, happy days! That is still one of the strongest growth figures of any country
 
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Camry

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What are you talking about? Falling GDP growth does not mean a recession. You cannot be in a recession with positive growth and GDP growth in Q4 2007 was 3.5%. If that means a recession, happy days!
You aren't supposed to be measuring it relative to a year ealier. :rolleyes: You sem to have read somewhere that two consecutive quarter of falling output (i.e. negative GDP growth) is a common definition for a recession. But when people say this they mean from quarter to quarter, not annual growth rates.

Lord, give me patience.
 
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mercman

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In simpler terms, two consecutive quarters each with falling growth represents a recession.
 

Sunny

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You aren't supposed to be measuring it relative to a year ealier. :rolleyes: You sem to have read somewhere that two consecutive quarter of falling output (i.e. negative GDP growth) is a common definition for a recession. But when people say this they mean from quarter to quarter, not annual growth rates.

Lord, give me patience.
Sorry you are right. I wasn't very clear. My point I badly made was that even if Q1 figures confirm Q4 and we enter a technical recession (and I don't think we will), all we are likely to see going forward are periods of below average growth but still growth. I think if you are to give any country the option to have a technical recession where the economy is expected to grow 2-3% year on year, they will take it. Seem to remember that German GDP growth halved in the last quarter 2007 and nobody is claiming they are in or near recession. Its way to early to say Ireland is in or anywhere near a recession.
 
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Camry

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Sorry you are right. I wasn't very clear. My point I badly made was that even if Q1 figures confirm Q4 and we enter a technical recession (and I don't think we will), all we are likely to see going forward are periods of below average growth but still growth. I think if you are to give any country the option to have a technical recession where the economy is expected to grow 2-3% year on year, they will take it. Seem to remember that German GDP growth halved in the last quarter 2007 and nobody is claiming they are in or near recession. Its way to early to say Ireland is in or anywhere near a recession.
You can hope I suppose. I can;t think of any credible person who still believes Ireland will experience an increase in GDP this year as a whole.

If you want to talk year-on-year, I reckon GDP will be around -5 or -6% in Ireland by Q4 2008.

Feel free to file a link to this post and remind me of it at a later date.
 

MrKeane

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Todays unemployement figures are yet another indicator that we are staring recession in the face, anybody who does not see it now and who increases their exposure to anythins associated with the construction sector will deservedly get burnt badly.

Where is the rental market going to come from? Property for rent (and for sale) is rising every day, unemployment keeps rising, this will lead to a ripple effect, less overtime in service industries, less commission, less tips etc., so less money for rent etc.
 

Irishchappie

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I've been renting in Dublin for a number of years, couldnt afford to purchase at the time when I first moved here and now I just prefer to rent, keeps my options open and renting in a shared house is so much more appealing than having a place on my own, gets lonely living on your own.. and its cheaper too..

I'm moving house soon and my landlord is upping the rent by a huge amount in the place im moving out of, €500 a month, which is nuts but he is convinced he is gonna get it. Apparently there are 3 other houses on the street renting at this price and everyone is being snapped up as soon as they are available for rent. All these are 3 bed townhouses by the way in the Dublin 6w area..

So apparently in some areas, rental properties are in great demand and prices are increasing..

I.C
 

Shark Trager

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I let an apt in Dublin about 5 weeks ago,2 bed E1350 pm,phone rang off the hook,let it in record time,are we facing a crash?Short answer No.
 
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mercman

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Shark, 5 weeks ago Bertie Ahern stated that he wouldn't retire until the next election !!! 5 weeks is a long time in property and politics.
 

Shark Trager

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Mercman,the question was "Do you thinl we are facing a rental crash?"I provided anecdotal evidence we were not,how are you comparing political life with the rental market?
 
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mercman

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And as or if not more important is that sentiment is been eroded. Without placing a Political angle on the matter, the opposition who are jockying for position have managed to blast through negativity after negativity after negativity, so much so that it is now sticking. First it was residential property, then commercial property and now consumer demand. This is now causing rents to decline. If any of these half witted Politicians could shut up and declare their own policies, the entire economic base would not be as effected as it is.
This was my comment of yesterday. As soon as Consumer demand is affected all other matters follow suit. Just check www.daft.ie and you will see the rental market. Properties that were achieving €2,000 last year are now fetching €1700 now. Properties that were fetching €1,400 in January '08 are now down to €1250 now. These are my own instances. It's down to affordability, confidence and sentiment.
 

Shark Trager

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Mercman,when I let the apt 5 weeks ago,there were roughly 4k worth of rentals according to daftwatch,this is still the case,ergo I would expect the same volume of callers.
Sentiment-confidence,while I am sure it plays a part in decisions relating to luxury purchases ie cars,holidays etc providing a roof over your head?I would have thought notI am open to correction.
I think what is happening is prices are returning to normal after last years 20% increases in rent,which was unsustainable.
 
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mercman

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In case you think I am imagining any of this, the comments are from www.irishpropertywatch.com. Worth your while having a look.

This is the first rental report from IPW.
The number of properties for rent in Ireland was just under 11k and around 1 in 20 properties reduced the asking rent
Over the period 27th March to the 2nd of April 2008 there were 574 rental price reductions. The average reduction was just under €100 per month or 6.5% of the asking rent.
In the future we intend to publish longer rental trends and movements to keep you up to date on developments in the rental market.
 

Shark Trager

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This 1 in 20 is prob a seller trned reluctant LL,sitting out the downturn,offering a property to let at a discount to a tennant who does not mind EAs showing it to buyers,I would think.
 

Shark Trager

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These type of reluctant LLs will not last long though and will quickly flush out of the market,when the realisation of what being a ll entails,and that house prices are not going north any time soon.
 

Mrs.B

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..... & what do you think will happen to house & rental prices once these amateur / reluctant LLs flush out of the market??
& how do they flush out?
how many reluctant / amateur landlords do you think there are in Ireland? 50k / 100k / 250k? /More?
 

Shark Trager

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..... & what do you think will happen to house & rental prices once these amateur / reluctant LLs flush out of the market??
& how do they flush out?
how many reluctant / amateur landlords do you think there are in Ireland? 50k / 100k / 250k? /More?
When they realise they will have to discount price to achieve a sale,prices are going nowhere north in the next no of years,and property will sell if its priced well.
How many LLs ??well you sound like you know all the answers,so I am sure you will tell me.
 

television

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What I want to know being an amateur Landlord is if I am going to rent my three bedroom house in Drimnagh for 1400 a month. it will be on the market in 2 months. People have to live somewhere and so if they are not buying then they will have to rent. So heres the way I see it. Those who would have bought will now continue to rent in the medium term. Those people who cannot sell houses will begin to rent them out. Those new people into the rental market who may have decided to buy will rent the new houses on the market. IN the medium term as house prices bottom out (over the next year) and begin to rise by maybe 2-3 percent (over the following years) those renters who will begin to see a slight price rises in houses will begin to say I better buy before prices rise any more. To conclude a moderate fall in rental prices in the medium term but not a rental crash. I am talking Dublin here and the closer you are to good transport and the city centre the better. Also in the log term the population of Dublin is set to rise dramaticlly in the next ten years. So I say If do have property rent now dont sell even if you do get a good price over the net few years. House prices will skyrocket in the next ten to fifteen years. I'm buying another property in 6 months time somewhere close to the Luas within a 3 mile radius of the city centre.
 
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mercman

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Television -- That is a very well thought out, constructive and sincere post. I just wish I had the ability to look into the future like you. Tell me would you have the Lotto numbers for next Wednesday and next Friday.

As job losses increase it will have further damage to sentiment. Coupled with the state of the Financial Markets, the Banks reducing their lending and general downturn, the short term looks somewhat bleak. House prices to Skyrocket in 10/15 years. Maybe / Maybe not, but don't hold your breath. Saying all that and joking aside, the manner in which you are building your portfolio seems quite credible.
 

Shark Trager

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Rents were never monitored before in any organised fashion,LLs,well half smart ones,will put a number of ads in starting at what even he knows is above what he will get,and working down the price,til he gets a tenant,all it will have cost him is a few ads in the Herald,or on daft,that is what is been captured by these sites,and now been passed off as rental drops.
 
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