The REA group has published its latest Average House Price Index
THERE HAS been a marked increase in the number of private landlords selling their properties in recent months, according to Pat Dooley.
The director of REA Dooley Group was commenting on the latest Real Estate Alliance (REA) quarterly report which revealed the price of the average second-hand three-bed semi in Limerick city has risen by 4% (to €260,000) over the last three months.
Across the rest of the county, the average price rose 4.8% between April and June to €220,000.
While the survey focuses on semi-ds, Mr Dooley has seen the trend of landlords deciding to sell-up across the board.
“It’s something we have been looking at carefully from the end of last year up until now. In quarter four last year, the figure was roughly around 20-25% of the cohort of people thinking of selling were landlords. In our recent one this has jumped up to about 30%,” said Mr Dooley.
The Limerick-based auctioneer said it’s a very good time for landlords to cash in on their asset. In many cases, he says, they bought the houses in the boom times and were in negative equity for years.
“Prices are probably close to peaking so basically a lot of the landlords are saying it's a good time to get out. You have the taxation which is a problem for a lot of the smaller landlords. Capital costs are going up – looking after and maintaining a property – and the interest rate hikes coming on, all of that together makes it an attractive time to sell up," said Mr Dooley.
"When you can't increase your rent by more than 2%, in some cases, it just doesn’t make sense to hang on for a lot of them,” he added.
The consequences (of landlords selling-up) are less properties to rent but more chances for first time buyers.
“It’s very worrying for the rental sector. It’s a chink of light for people trying to get on the property ladder. We do deal with a lot of rentals in our city and Newcastle West offices. Nearly every day now we are getting a call from either one of our clients or somebody in the rental sector wondering how you go about giving your tenants notice, that they're thinking of selling,” said Mr Dooley.
The temperature will be turned up on already very hot rental sector.
“Absolutely. This is something we'll be keeping a close eye on. It will be detrimental to the rental sector as there is no supply coming up, or any little bit that is coming up is getting smaller and smaller and you have massive, unprecedented demand the whole time.
“All of the people that are coming out of properties that landlords are selling or want to sell, a lot of them have nowhere to go,” said Mr Dooley.
For example, if he puts up a three bed semi up for rent in a city suburb there will be up to 50 enquiries in a week.
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