RENTS IN IRELAND are too high, Tánaiste Leo Varadkar told the Dáil today.
Speaking During Leaders’ Questions today, Varadkar said:
“Far too many people have to spend too much of their income on rent, often at the expense of other things.”
Sinn Féín’s Pearse Doherty hit out against the Government’s housing plan, stating it is “failing”.
“Rents are out of control,” said Doherty.
The cost of rent nationwide has continued to rise in the first quarter of 2022, with average rents increasing by over 11% compared to early 2021, the latest Daft.ie Rental Report has shown.
The report showed there were just 851 properties listed nationwide on the property website on 1 May.
With fewer properties available, the average rent has also increased by 11.7% since the first three months of 2021, with rents now costing on average €1,567 a month nationwide.
According to the report, this is the highest year-on-year increase in rents since late 2016.
The average rent in Dublin is now €2,202 a month, which is up 10.6% compared to the same period in 2021.
Other cities are also seeing a sharp increase, with Cork rents increasing by 10.2% year-on-year, Galway rents by 13.8%, Limerick rents by 15.5% and Waterford rents by 16.2%.
Affordability and availability
Varadkar said there is a “dual crisis” in the rental sector right now.
“It’s one affordability and also one of availability. And sometimes when you try to improve one of those things, you can actually make the other one worse. And that’s why we need to be very careful about the policy and policy interventions that we make as a government,” he said.
Referencing the Daft.ie report, he said tenants that stayed in their properties, on average, faced a 10% increase since 2017, but he acknowledged that it was a very different picture for new tenancies.
Sinn Féin’s Pearse Doherty told the Tánaiste that by every meaningful measure the Government’s housing plan is failing.
“The consumer price index that was published this morning shows that the rent paid by all private renters new and existing tenants has risen by 9.3% in the past year,” he said.
Croí Conaithe
Doherty also raised issue with the Government’s new housing initiative, known as Croí Conaithe, which aims to support the building of apartments for sale to owner-occupier households in Dublin, Cork, Limerick, Galway and Waterford.
The planned scheme aims to bridge the current “viability gap” where the cost of building apartments in these cities is higher than the market sale price. The scheme plans to deliver up to 5,000 apartments by 2026.
The new State subsidy will see developers secure up to €144,000 in funding for each apartment they build outside the Dublin area.
The Government argues that increasing the supply of owner-occupier apartments frees up housing in the rental sector and can reduce pressure on the rental market, in turn alleviates pressure on our social housing waiting lists.
However, Doherty hit out at the proposal, stating that developers can get up to €144,000 for every apartment that they deliver, but there is no price reduction for home buyers.
The apartment buildings will be sold at the market value, with the Housing Department stating that a one-bed is estimated to cost €320,000, a two-bed to cost €390,000 and a three-bed to sell for €445,000.
“Who on earth can afford these prices? They are off the wall. Your scheme is certainly not about creating affordability for those on ordinary income,” said Doherty.
He said the scheme will drive up house prices even further, as developers will simply price the subsidy into the sale price.
‘Madness’
Of all the government housing schemes it has come up with, “this one takes the biscuit”, said Doherty. H added: “This is absolute madness.”
Varadkar did not comment on the specific plan in his response to Doherty, but said at this point, the Government has to consider “what more we can do to improve the situation”.
“It’s very clear that small landlords are selling up and leaving the market. I often hear you and others making out that they’re making a killing. That’s not the case. If that was the case, they wouldn’t be leaving. We have to look at ways to encourage more landlords to continue to rent out their properties, and maybe encourage others to rent out properties for the first time,” he said.
Last week, Housing Minister Darragh O’Brien said the Government might need to look at tax measures in order to keep landlords from exiting the market.
Varadkar also stated his support for the Help-to-Buy scheme, hitting out against Sinn Féin for opposing the measure.
“That’s already helped 32,000 individuals and couples to buy their first home, people who otherwise might not be in a home and would still be renting,” he said.
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