RENTS IN IRELAND have soared 11% in 2017 to an all-time high of €1,200.
The latest quarterly rental report by Daft.ie shows that the average monthly rent across the country was €1,198 in the third quarter of the year.
In Dublin, the increase in rents in the year to September 2017 was 12.3% and rents in the capital are now almost 23% higher than their previous peak in 2008, or €330 a month.
In the city centre, the average rent is €1,819, with the south city and south county more expensive at €1,890 and €1,955, respectively.
In Cork city, rents rose by 5.3% in the year to September, reaching €1,144. In Galway, rents were 9.8% higher than a year previously at €1,057. In Limerick city, rents rose by 10.9% during the past twelve months (€956), while in Waterford (€797) the increase was 8.5%. Outside the five main cities, rents have risen by 10.8%.
Overall, rents are now 16% higher than their 2008 peak.
Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said:
“Rents continue to rise, and rise at close to record rates, due to an acute and worsening shortage of accommodation. Four of the five largest quarterly increases in rents have now occurred since the start of 2016 and rents in 46 of the 54 markets covered in the report now exceed their Celtic Tiger highs. Rents in some parts of Dublin have now risen by 90% from their lowest levels in 2011.
It is now increasingly agreed that the country needs at least 40,000 and probably closer to 50,000 new homes a year, to meet underlying demand. As Ireland catches up with its peers in terms of demographics and urbanisation, the construction effort should focus on apartments, of all types, in major urban areas.
“What is stopping that from happening is how high costs are relative to our own incomes. Caps on rent increases may help sitting tenants but are at best of no consequence in solving the underlying challenge.”
On 1 November, there was 3,365 available rental properties on Daft.ie to rent. This is the lowest number ever recorded for this time of year, since the series started in 2006 and the total marks a 16% decrease on the same number a year previously. In Dublin, there were just 1,300 homes available to rent, compared to more than 6,700 on the same date in 2009.
Landlords
However, a spokesperson for the Irish Property Owners’ Association said its members were not seeing any of that money.
Stephen Faughnan IPOA Chairman said:
“Government policy over the years has been the direct cause of the current shortages in the sector by implementing legislation and compliance that have forced the investor out of the market and is continuing to do so. When will politicians see the light and instead of implementing hair brain legislation just listen to the practitioner in the sector for genuine reform? Supply, supply, supply.”
Housing
New research from the ESRI also published today shows that things aren’t much better for house buyers. The research finds that over the period from 2017-2020, house prices could rise by 20% in real terms if projections for strong economic growth over the period are realised and if the slow rate of housing supply continues.
Kieran McQuinn, Research Professor at the ESRI, commented, “As economic growth continues and the banking sector recovers, it will be critical to monitor credit provision to avoid fuelling house price inflation.”
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