Thursday, September 06, 2012
Lars Frisell thought it would be easy to find an apartment to rent in Dublin, the epicentre of western Europe’s biggest real estate crash, after he moved from Sweden to become chief economist at Ireland’s central bank.
Three months later, he’s still looking, joining students, hi-tech professionals, and would-be homebuyers competing for space and pushing up rents in the Irish capital.
"You’d think that there’d be so many apartments and so many houses available," Frisell told a gathering of Irish accountants last week. "There’s not."
The property crash has encouraged people to rent rather than own their properties, lifting the number of households in rented accommodation by 47% in five years, the Central Statistics Office said. That creates a chance for real estate investors to profit from higher rents.
Kennedy-Wilson Holdings wants to own more than a thousand homes in Ireland after purchasing a 210-apartment block close to Google’s European headquarters, said Peter Collins, the Dublin-based managing director of the group’s Europe arm.
Kennedy-Wilson teamed with Canadian insurer Fairfax Financial Holdings to buy the apartments for about €40m in June.
Average rents have fallen about a quarter since the market’s peak, less than the 50% fall in prices. In Dublin and Cork, rents have risen on an annual basis for the last six quarters even as prices fell, according to Daft.ie.
Rents for three-bed properties in Dublin rose 12% to €1,709 a month in the second quarter from a year earlier, while the average rent across all property types rose 1.8%.