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RENT IN DUBLIN is up by 16.6% this year, a report carried out by property website Daft.ie has found.
The company’s Rental Report for the third quarter of 2014 found that average rent in the capital rose to €1,372 per month.
Demand is still outstripping supply, with less than 27,000 properties available to rent in Dublin in the first nine months of this year, compared to over 47,000 in the same period in 2011.
Nationally, rent increased by over 11% in the space of 12 months with the national average rent now €933 compared to €842 a year previously.
In the other city centres, rents continue to climb. Waterford experienced an annual rise of 5%, Limerick 6%, Galway 7% and Cork 8%. Most of Dublin’s neighbouring counties also continue to see double digit inflation with Meath witnessing growth of 11%, Wicklow 13% and Kildare 14%.
The number of properties available to rent has continued to plummet. On 1 November, there were fewer than 5,400 properties to rent nationwide, the lowest figure since May 2007.
Commenting on the report, Ronan Lyons, economist at TCD and author of the Daft Report, said: “In many ways, the lack of available properties to rent is more concerning than the high rental rates, although clearly the two phenomena are inextricably linked.”
The only silver lining is the fact that this quarter was the first time in five years that rent inflation in the capital eased somewhat. However, even if an easing in Dublin inflation continues and stops the affordability crisis from worsening, it does nothing to change the availability crisis.
Year-on-year change in rents in major cities during the third quarter of 2014:
Rents continued to rise throughout the country between August and October, according to the figures published in the report. Over the last two years, the average rent nationwide has risen by almost €150, from €790 a month to €933.
That national trend is being driven by Dublin, where rents are up an average of €300 a month since 2012.
Lyons noted that the latest figures show that rental inflation outside the cities is above what might be considered a healthy rate, in line with the rest of the economy.
While prices in the rest of the economy were roughly flat in the year to October, rent inflation stayed above 10%. A small easing in Dublin inflation – from 15.6% to 14.5% – was offset by an increase in inflation outside of the capital, up from 5.7% to 6.6%.
In Dublin, rents are now almost 30% above their lowest point in 2012 and less than 10% below their 2007 peaks.
Lyons said that this is “very damaging for Dublin’s competitiveness as a location for foreign direct investment”.
“The goal of housing policy should be to ensure that, regardless of whether it’s to rent or to buy, rural or urban, housing is abundant and affordable,” he added.
Journal Media Ltd has shareholders – Brian and Eamonn Fallon – in common with Distilled Media Group.
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It’s an absolute disgrace, sick of paying such high rents, if only my boss offered the same raises as my landlord!
Rent controls should be introduced.
Main problem i see is rents don’t cover the high mortgages and to add to that the landlord has to pay tax on a loss each month !
The rental market is an absolute nightmare in Dublin. 3 bed houses in absolute shit holes going for as much as €1400 per month. And it’s not as easy as suggesting that people move out of Dublin. My husband works in Dublin, my children are in 6th and 5th year and it’s not fair to uproot them from school at this critical stage in their educations. It will only get worse when they are both in college in 2 years time. The idea is that they both live at home to save on costs but I genuinely don’t know how we’ll manage the way things are going. There was a statistic on an article here about the numbers of people immigrating and emigrating to and from this country recently. There was very little in the difference but the biggest issue with that is that the vast majority of the people leaving seem to be leaving the family home. But most of the people arriving need to find somewhere to live and most of those come to Dublin because of employment opportunities.There needs to be more building done in Dublin and there needs to be investment in other parts of the country so that companies can choose other locations to set up shop. My friend rented her house out recently, there was literally a crowd of people coming for the viewing. One guy offered the first years rent in advance (at €1500 per month), that’s how competitive it has become.
Rent controls are needed.
Rent controls can do F all if demand is much higher than supply. Landlords and people will find way around it on the shy. Whatever you do – you cannot control fundamental economical rule. The only real way to stop it is to increase supply.
Blanket rent controls are not the answer because in some cases, the rent doesn’t even cover the mortgage. We just need more properties and it is time to seriously discuss building up instead of out. But decent sized apartments that will comfortably house families. Not the boxes that are currently built here.
In other European countries, rent controls seem to be working successful. As usual, vested interests in Ireland.
@Andrea – here’s another problem. The solution you have offered does not address the problem you have identified.
Rents are based on what people owe on their mortgages and this is how the market is being controlled.
This has nothing to do with supply.
Tax is ridiculous also on the properties. If the landlords face higher costs they need to put the price up by double the cost they are trying to cover as the tax is effectively 52%. We have a seriously disfunctional property market after the boom, made worse by NAMA creating a situation where supply can be distorted as there are too few suppliers of property.
ITS, have you ever seen the size of a typical Paris flat?
This is bad for business. I said on this year’s ago all these new jobs etc in dublin are great but where will these people live. Got red thumbs no reply. No with slight inflation and no wage increeases we see renta soaring everywhere.
When the next property crash swings around… I will not help to bail anybody or any bank out.
The next bubble ia only around the corner at this rate, pricing seems to be a runaway train mismanaged by the government
Lamb is dead right, this runaway train needs to be stopped… We need to slow the economy. We can’t affect interest rates, so the only option must be used, we need more taxation to slow growth and demand for properties.
Lamb for election, 2015, running on a principal of more taxation. I wish you all the best.
My daughter is living in dread of her contract renewal date, rents in her block have ballooned over the past year. The government needs to revisit the private rental sector and rethink restrictions on bedsits. Yet another decision made after a late night in the Dail bar.
Martin, you’re of course assuming that driving up rents wasn’t the intention when removing bedsits from the market, which isn’t clear to me.
Government policy:
Phase I: Drive up house prices and rents to support underwater mortgages
Phase II: ????
Phase III: Profit $$$
And I’ve heard from a couple of estate agents that NAMA is now steadily evicting families from their homes because NAMA wants to sell the house.
Yes, even if they’ve been paying their rent.
Ending lease agreements to sell is actually pretty reasonable, whatever way you want to look at it. We don’t want NAMA as a government letting agent for the next 50 years., we’ve enough quangos thank you very much.
‘Evicting’ is also emotive language. They are getting notice of the termination of their contract and will have to find somewhere else to live.
In theory, these properties will either (1) house someone currently in the rental market, or (2) be returned to the rental market by their new owners.
I agree we need security of tenure in our rentals, but renting from NAMA can’t have honestly been appraised as a long-term housing solution by anyone.
Its local government policy to keep dublin low rise and preserve the low density ancient rental stock pretty much.
You can complain here if this is affecting you. You wont be invited to complain for a long time!
Well we tried the high rise route with Ballymun in the 1960s and look what happened there. Local Authorities just built them, filled them and abandoned them.
High rise is definitely the way to go but they need to be properly managed and while that may be possible in the private sector with decent regulation, I fear for the prospect in the public sector.
I am not talking about social housing.
Whether you are talking about it or not it’s part of the equation. Lack of social housing is driving people into the private sector thus reducing availability and by extension, increasing prices.
Martin, Social Housing is not the solution, it’s one of the causes of the problem. There is nothing wrong with a private rental market if it is regulated, controlled and involves professionals instead of small time one off LL’s and/or “incidental” unwilling LL’s.
The headlines state that “rents are rising” when in fact it should read “Landlords taking advantage of Government’s failure to address property crisis”.
Tenants are trapped – they have no alternative and Landlords are taking full advantage much like tenants did the same when rents fell.
There is simply too much intervention in the market. The only way to stop these hikes is to cap the increases, not the rents.
Rents should not be allowed to increase more than the cost of living.
There should be no more social housing built and the entire programme should be unwound. Rent allowance should be abolished.
These interventions have merely caused a lot of the problems, we have been doing this for years and years and it hasn’t worked.
It was “hidden” during the bubble when that Government threw money into Rent allowance and pimped property with the help of the banks who were dishing out cheap credit.
In Germany there is no social housing – it doesn’t exist. In Munich over 60% of people rent their homes, not for a year or two – but for decades.
Unless this Government radically shake up the rental market and stop kow-towing to the vested interests,
nothing is going to change.
I disagree. The housing crisis which began in this country in the early 90s was, in my opinion, partly caused by selling council houses to their occupants and not building any new stock. People who had moved beyond the need for social housing were simply sold the house they occupied.
Rent paid was allowed for against the purchase price, and I know in our case (my folks bought ours) we were effectively handed equity by council.
With the council house stock reduced, and no end in sight to social problems, we saw a surge in the privatization of social housing though rent allowance. Now with a rental problem on our hands, the government starts giving incentives to their developer buddies to build, and to BTL investors to create a housing stock. By the mid 00s we had half the market as investors and bubble (or second bubble, depending on your perspective) was in full swing.
And now rentals have swung far away from what is affordable to people on subsistence (or below) wages, with no way to fix it, and strained government resources paying the mortgages of BTL investors.
Germany this, Germany that. I hear it all the time in relation to property, but we’re not about to transpose 60 years of housing strategy, spatial planning and the marshall plan over to Ireland. The fix we need in our cities is a sensitively planned social housing strategy.
Ronan,
I am not sure what part of my post you disagreed with, you are agreeing with me when I say that
Social Housing is part of the problem.
Germany did not transpose 60 years of housing strategy and that is not what is needed.
It is a step by step process to eliminate a waiting list of 90,000 people which only serves to put pressure on the private rental market while politicians flounder on how to solve it.
No more Social housing should be built in this country again.
It has been a disaster for decades.
IN 2004 Spain, Ireland and Greece had the highest property ownership, 84%, 81% and 73% respectively – now do you think its coincidental that these three countries were the worst affected by the events of the past few years?
“There should be no more social housing built and the entire programme should be unwound. Rent allowance should be abolished.”
The bit above. I disagree and believe that we should, in fact, build more social housing. It is a vital underpinning to support a standard of living for those that cannot provide it for themselves in a local and global context.
Ronan,
You are proposing to continue with a policy that does not work.
If more social housing is built, then prices increase – not decrease, the more the prices increase, the more people who cannot afford to buy/rent and the more people who apply for social housing.
That is how we have operated for decades and it does not work.
People’s standards of living has fallen due to the rising costs of housing, proposing more social housing perpetuates the problem.
In Germany 5% of people receive assistance in paying their rent.
60% of people living in Munich rent, they have secure tenancies, rental increases are capped to no more that 15% in any three year period and that is only if the market allows it.
There is no social housing in Germany, not because they don’t help people, but because they do and they do it because they do not intervene in the property market by subsiding property price rises.
They don’t have the crisis we do and yet you dismiss this fact.
Seriously, is there any Dept that this Govt is capable of running? They promised an overhaul but the longer they remain in power the bigger the mess they are creating. These rents are making it more attractive to be on the dole and join the queue for a free everything.
ive been renting for about 15 years now ive spent 81,000
im really considering buying a piece of land and a mobile home..
@hsh – Here’s some info about NAMA to explain what they are doing,
No offence to the Irish people, who have to pay those rental prices but for me those prices are cheap. I’m originally from Cork county but now I’m living and working cambridgeshire. I would prefer to live in Cambridge due to work but the rental prices are ridiculous. I’ve done a comparison between Cork cambridge as both cities have a similar population size.
Average rental prices in Cork are the following:
1 bed = € 664
2 bed = € 884
3 bed = € 963
4 bed = € 1163
5 bed = €1366
Average rental prices in Cambridge are the following, which I converted to Euros:
1 bed = €1129
2 bed = € 1462
3 bed = € 1865
4 bed = € 2269
5 bed = € 3604
The minimum wage in GB is £6.50 which is € 8.13
Landlords aren’t complaining :)
Aren’t there a few hundred apartments being built in Ballbridge right now?
and I noticed the building beside the old Burlington hotel has disappeared and due to be replaced by a few hundred more apartments…
Now is this a real supply shortage for housing or just another “perceived” shortage to get a few landlord and builder tax breaks in?
Don’t one in 5 homes in Ireland lie empty!!!
Folk need to realise that all sectors of the property market are interlinked so that one segment of the market living in properties rent-free (arrears) means that everybody else has to pay more.
The rental market is bursting because the sales market is completely borked and it’s borked because vendors are holding the market to ransom. There is an increasing trend of buyers being told to increase their bids when they already the high bidders. Same for landlords. It’s very easy to force high rents when paying the BTL mortgage is completely optional.
So the people who would live to buy but can’t (or won’t) are forced to rent instead.
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