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THIS MORNING BRINGS with it the news that the average rent in Ireland has passed the €1000-monthly mark for the first time since the Tiger-heights of early 2008.
It’s an inauspicious claim to fame. For most tenants in the country, particularly in Dublin, the Irish rental situation is a source of dread. People live in fear of a rent increase and of quite literally being unable to afford to live somewhere.
The issue of housing and homelessness dogged the last government almost from its inception. Yet for all the endless talk and political grandstanding the situation just seems to be getting worse and worse.
This morning’s news feels like a watershed. If the country is paying pre-crash rents but isn’t in a pre-crash state of affluence (at least not yet) then something doesn’t add up. So what can be done?
Supply and demand
“Look, the only way a landlord can turn away business is if the demand is there,” says economist with Daft Ronan Lyons.
He argues that while spiralling rents are a huge problem for current renters, a bigger picture needs to be looked at.
“The high level of prices is a sign that the system isn’t functioning properly,” he says.
We know at present that in the region of 30,000 or 40,000 new houses are needed each year to cope with our growing population. At present we’re getting about 15,000.
We need more building and we need it now. The solution isn’t to ban rents from moving up, the solution is to fix the market.
Easier said than done.
Various measures have been introduced. Two years ago legislation was introduced to prevent landlords from discriminating against people on rent supplements.
Last November, after months of speculation, a two-year rent freeze was brought to the table. On top of this, property owners are required to give longer notice to tenants of rental increases or eviction, while any such increase would have to be justified by the landlord in question. However, it should be pointed out that the two-year timescale was simply an extension of the one-year rule that had already been in place. So, not that revolutionary then.
The rental freeze could be misconstrued as a blanket moratorium on raising rents. That isn’t the case (if it were, average rents couldn’t increase) – it simply means that rents can only be raised once every two years, while new leases are capped at ‘market value’.
As it often does, politics took a hand in the situation. Former environment minister Alan Kelly had long touted the fact that he wanted to link rental increases to inflation, a form of rent certainty. That was eventually nipped in the bud in favour of the rental freeze by finance minister Michael Noonan.
New government
But there’s a new government in town now. One built on not-entirely stable foundations with a major onus on it to do something about the problem.
A new rent certainty bill is to be brought before the Dáil today by Sinn Féin. Rent certainty is also something that household charity Threshold have been pushing for for a long time. This is understandable given it routinely deals with tenants who have been quite literally priced out of their homes by rent increases of 20% to 40%.
“The rent increases we’ve been seeing are not justifiable,” says Stephen Large of Threshold.
Fair enough, a landlord has to cover his costs and make a profit, but this is a situation that we’re seeing across the board, and not just in low-income households. And it’s spreading around the country.
The end result will be a society that for the vast majority of its citizens buying a house is simply not an option, and never will be, according to Large.
“That is not necessarily a bad thing – for too long renting has been denigrated as paying dead money, with home ownership seen as the only thing worth aspiring to at the expense of all other options,” he says. “Rethinking what it means to be a renter in Ireland should be first on the agenda.”
Lyons and Large disagree as to what immediate actions are warranted and effective, understandably given Daft looks at the market from a long-term viewpoint, while Threshold have to deal with the here and now of people in crisis.
“Freezing rent is appealing but it isn’t the answer. Neither is rent certainty,” says Lyons.
The problem isn’t rising rents – they’re a symptom. The problem is that we aren’t getting the solutions that we need.
“We need a coherent national strategy, a structured government-led response on the private rental sector,” says Large.
We have them for construction and home ownership, now we need a strategy for what part rentals are to play in the housing market. For too long private rentals have been the forgotten sector.
Both men are in agreement that immediate supply is the most pressing concern.
“At the same time we need to understand who the landlords are, who becomes a landlord, what can be done to make becoming one an attractive option,” says Large.
Most landlords own one property or are renting a property almost by accident – via inheritance for example.
“Becoming a landlord isn’t easy – there are plenty of requirements. Understanding the landlord’s role is vital in the overall context of a national strategy. What will attract people to providing that service?”
Kickstarter
“I hope that the new government and a new minister [Simon Coveney taking over from Alan Kelly] will kickstart this,” says Lyons.
The first thing we need is consensus and evidence, a new study commissioned that people actually agree on. Until you do that and compare to best practice in other countries you can’t get clarity on where the problem is.
The alternative is far from appetising – people being priced out of their own homes, living at home with their parents, commuting longer distances, and poorer households simply being priced out of the market completely.
“If things continue as they are I would fear for foreign investment into Ireland,” says Lyons. “What company will come here if their employees can’t afford the rent?”
“At the moment a landlord can increase the rent because they can,” adds Large.
There is no alternative. And as things stand rents will continue to increase and other things will have to give. And that’s not sustainable.
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Another FFG record ..
Collectively , them two political parties have ruined Ireland . Vote for the cat next door rather than FFG
@BL Music: I actually would prefer to vote for my cat next door instead of the useless opposition.unfortunately.
@John Terry: the cat next door to me gets walked on a lead. True story.
@John Terry: If you do the same thing , don’t expect different results . Nobody could be as inept as the current shower. Look at homelessness’s, health, crime , the amount of people leaving the country , the decline in our cities , vulture funds, price gouging, the erosion of our neutrality , loss of our little sovereignty… the list goes on and on .. Anything would be better
@SF Means Sh!t 4 Free: but it’d give the powers that be a boot in the @r$€ that they need to do better. Seriously like, cost of living and housing aside, even if you or your child get injured/badly ill over the weekend and get referred to hospital you can be there for up to 24 hours before being seen or even worse, kept in until Monday morning until someone is available. The acceptance of poor standards in every ministry in this state is a dark legacy for FFG, let alone the vast sums of OUR money is wasted year in year out for the taxes and levies we pay.
@James Reardon: everyone in this country would love a better government,but unfortunately we have weak opposition.I’ve voted social democrats the last few years ,not that I want them in government but because they are to me the only option on the ballot paper.sad reality.
@John Terry: I was Labour until they screwed over their whole voting base. Never again. I’ll keep voting SF out of protest, let them put up or shut up.
@BL Music: all populist tripe
How on earth are people meant to get by when a bog standard apartment with 1 room is minimum €1500 per month?
@Sylvia Power: sharing…
@no no no: So share a bed with someone in that 1 bed Apartment is it? Right.. You’re part of the problem.
@Chett Richards: Do you disapprove of couples living in sin together or something??
@Sylvia Power: Emigrate. Hard to believe that it’s cheaper to live in Switzerland at this stage.
@Fallible Guy: London too.
We now live in a society where it’s survival of the fittest and duck everyone else. Capitalism as we know it, is no longer fit for purpose.
@Mike Dunne: it’s the same capitalism that generates the wealth that pays for the services those in need use
@Oisin CK: The same capitalism that needs to be bailed out by the taxpayers after the capitalist system facilated by politicians fail. The same taxpayers are then forced into austerity inflicted by the same politicians to repay for the gangsterism of capitalism. Remember the €60 Billions plus still owed by every citizen of this state due to the gangsterism of the banks and developers facilated by the same political parties that are again in power.
Brutal,they’re destroying peoples lives with they’re inability to make the necessary decisions to solve the problem but lining they’re pockets up well, terrible to say they’ve had almost a decade of this going on and all that’s happening is it’s getting worse,I really don’t want to have to watch my kids emigrate because of the future here which basically is work every hour sent to you and have sweet **** all what a joke for a rich country it’s so badly managed
Typical. And yet so many people here want you to believe a Party that’s never had any power in the state is the biggest threat to your existence.
@Chris O’Brien: opposition parties should be running away in the polls but they are not.that tells you they are not trusted.
@Chris O’Brien: plenty of people are aware of the damage SF/IRA has done to this state as well as their numerous failures in Govt just up the road in NI.
Not surprising. A rising population and no new houses available to buy for rental or to owner occupy. The council and AHBs are buying up all the new housing. Everything new hoovered up.
A split society. Lots of extra housing for people in need, but lots of extra people in need as Ireland’s self serving leftie lawyer elite foist a load of legal obligations on the rest of its citizens as they soak up all the money from it via their bloated pay, fees and investments in asylum centre property.
Private rental sector is contracting, less supply leads to higher prices, or new supply is new build to rent, with no cap on the rent due to previous letting.
It’s simplistic to call it landlord greed. Interest rates go up, so landlords pay more interest to the bank, they pass this cost to tenant. Maintenance/building costs go up etc.
Pre-existing tenancies are almost all limited by RPZ legislation and anyone who evades it should be reported. Any landlord not paying tax should be reported and done for interest and penalties.
Blame the open door immigration policy, the inflation driven by large corporate activity due to our open economy policy, the “Ireland of a thousand welcomes” messages issued by Roderick O’Gorman in multiple non European languages about giving refugees free own door accomodation, the EU sending us lots of their excess refugees, etc.
In an effort to protect tenants, and keep rents low to keep the left happy, they have inadvertently done the opposite created this disaster.
Before the RTB, 15 years ago there was so supply chasing too few tenants. Landlords had no choice but to keep cutting rents. It didn’t matter if you got evicted as you could move into the same house down the street and probably get a better deal.
The quicker they remove the RTB and reset all the tenancy laws, the better.
@Ray Winters:
I work in the sector, RTB are a complete waste of space.
But trying to suggest the reason not enough houses is ludicrous.
The reason the rents dropped was we had 10 years of building 75,000 houses per year when we needed 50,000.
Since then we have 10 years at 25,000 when we needed 50,000
Another lie by the journal this week. Rents in Cavan have rose by over 100% this year alone. It’s a shit hole of a town and we are nearly paying Dublin prices
@Thomas Reddy:
I was actually going to rubbish your statement by going on Daft and quoting a real add but then….?
Up to €1,700 for a 2 bed apt in Cavan town?? Jeez
@P.J. Nolan: That’s a local farmer renting that apartment. She bought about ten properties in the last three years and has kicked tenants out and put the rent up by 150%. The local FF politicians Brendan Smith and Niamh Smyth know about this and have done absolutely nothing about it.
@Thomas Reddy: you will likely find the local politicians are landlords too
@P.J. Nolan: I get an 2 bed beside central London for less then that! Says it all
FFG. Treasonous.
@lWOk0fWf: FF and FG = democracy, jobs and investment. SF/IRA = thugs and flight of investment
@Oisin CK: nonsense.
Stockholm syndrome right there.
Would be great to live in a country where the struggles of average people and homeless children would get reported on daily and not be covered up and ignored by the biggest media companies under orders of the government. All hail FFG, we sheep shall obey!
I know yer all gonna hate me here. I have an apartment which I let (just 1), I pay %52 taxes on this, I rent for 1600 and I get 770, each time a tenant leaves I need to put approx. 3k of work into renovation. Anytime goes wrong I need to fix it. The government gets most the money not me.
We lived happy life four years ago with 5 children in one bedroom apartment. Many people just blame everyone and everything but this is their own problem! Nobody needs to know that!
The government need to go ASAP the cost of rents in this country are a disgrace a tiny 3 bed my daughter lives in with 3kids costs €1500 amth she couldn’t keep up mortgage repayment on her home after her husband took his own life during lockdown as he felt he couldn’t provide for them all. They have 2 kids with special needs. I don’t understand how they can get away with allowing greedy landlords to charge so much, a friend of mine signed a lease on a home in Sweden just 2 days ago for his wife and family 6 bedroom house the rent is just €1100 amth we are being robbed every direction we go in this country it has to stop
Looking absolutely forward too voteing for SF
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