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RENTS CONTINUED TO rise in the year to March, despite government attempts to address spiralling costs.
According to the latest rent report from Daft.ie, the average rents rose by an average of 13.4% in the first quarter of the year. That means the average monthly rent across Ireland was €1,131, the fourth quarter in a row that a new all-time high has been set.
In Dublin, rents are up 13.9%, with the average property in the capital costing €1,668 a month.
The rest of the country’s cities have seen rises with the average rent in Cork now €1,107 (up 10.4%). In Galway it is €996 (up 10.6%), Limerick €892, (up 12.6%) and Waterford €757 (up 10.2%).
The rise in prices is exacerbated by a severe lack of supply, the report shows.
There were just 3,084 properties available to rent nationwide on 1 May. This is the second lowest number on record, in a series that starts in January 2006. The availability of rental accommodation has not improved on the all-time low recorded in May 2016, when 3,082 properties were available nationwide.
Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said the report shows “extreme distress” and said the government’s rent control measures were not helping.
“While the headline rate of inflation in rents has eased slightly, the market continues to exhibit signs of extreme distress. Rents are at a new all-time high, while the number of homes available to rent remains at the lowest levels on record.
Regulatory measures designed to limit rent increases could only ever have a very limited effectiveness in a market with such a scarcity of supply. Indeed, there is evidence to suggest that rent increases for sitting tenants have been only half the size of increases faced by new tenants.
“The more appropriate solution remains to increase supply. This includes both making better use of the existing stock of housing and building substantially more, in particular more apartments.”
Reaction
The report has led to widespread reaction, with Pat Doyle of Peter McVerry Trust saying it was “deeply worrying”.
“The report paints a deeply worrying picture and shows the current situation is unsustainable. Tenants are under huge pressure, and those people who are dependent on the rental system for their housing needs are looking at rents that are up to 15% higher than the Celtic Tiger peak with the lowest number of properties to rent since 2006. Our concern is that rapidly rising rents will lead to more tenants becoming homeless.”
Niamh Randall, National Spokesperson for the Simon Communities said:
“The soaring rents and plummeting supply within the private rented sector must be constantly monitored and addressed. These issues are preventing people from finding and sustaining affordable homes within the rental market.”
Focus Ireland Director of Advocacy Mike Allen said:
“Good honest law abiding landlords who restrict rent increases to 4% between tenancies are being made fools of by the fact that there are other unscrupulous landlords clearly ignoring the rules and charging what they want with no risk of being called to account. We need action on this matter.”
The Irish Property Owners’ Association chairman said the report showed landlords were rewarding “good tenants” by keeping rates below market levels.
“This has always been the norm in the market with landlords valuing their good tenants and showing that value by not increasing to market rent. Rent control introduced in over half the tenancies in the country now restrict these fair landlords when their tenants leave to 4%, it also affects rental properties that are being sold discouraging new investors to purchase rent controlled properties.
“The State has punished landlords that kept their rents low.”
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If there was one issue that fine Gael had to deal with from the financial crisis it was housing. They have failed miserably, in an absolute mess here now
@Dark Knight: Fianna Fail will fix that for you kid. Dont worry!
@Ben Coughlan: ah ya, a housing boom driven by fianna fail, what could possibly go wrong
@Dark Knight: I was being sarcastic, in reference to the circle of capitalism. They need ti build up in Dublin and Cork, just throw up some 30 storey towers in the city centre for young people to occupy. Its the only way they can stem the current crisis, it also keeps people in the city, buying groceries, supporting small businesses in the city, working for massive tech firms, and, of course, paying massive amounts in tax.
@Ben Coughlan: agreed, but might be more feasible planing wise to build high rises further out and work in. If you start from the centre you will face too any objections.
@Dark Knight: Stop talking so much sense!
@Ben Coughlan: Not going to happen. Unless it’s a four storey office block or two up two down you can expect years of objections. The whole planning system needs to be overhauled, particularly An Bord Planela who behave as if they’re curating a museum rather than planning for a living city. A small number of towers with associated services would do much to alleviate the problem.
Great advert for attracting foreign multinationals. Come for the low tax rate but your staff will be commuting from Cavan. What a joke.
@Peter Cavey: lovin dublin had a piece there lately about affordable housing in the commuter belt, houses were in cavan, Longford and Westmeath
@Peter Cavey: actually just saw an ad on fb by ebs that was like: “xx reasons why u should buy in Dundalk NOW” – and that was addressed to commuters.
@Peter Cavey: Nottin wrong with cyaavan hai
Landlords? What about the tenants that are breaking their arses trying to afford rent. How much profit do these landlords need to make? I think it’s ridiculous to suggest that investment will go down because of rent control. 1600 a month is huge when your mortgage is no where near that. These people saying the landlords are being punished should try to get by paying €800 each a month on a property you don’t even own that’s freezing cold nearly all year round. I wouldn’t dream of bringing a newborn baby back to my rented apartment and I’m paying 1200 a month it’s a shit whole. Rant over.
@Ultan: half of the rent goes in taxes so 1600 rent is roughly €800 and the mortgages for Dublin rentals far exceeds that. Landlords are losing money and subsidising tenants of actual costs. On top of the fact tenants can just stop paying rent without any way for the landlord getting the money back.
@Kal Ipers: The landlords own an asset. Paying that mortgage is an investment for the landlord. So if the landlord is struggling to pay off the mortgage on an asset they shouldn’t own it. All that’s doing is putting all of the pressure back on the renter.
@Cormac Delaney: Rental properties have about 50% higher occupancy rate than privately owned property. 3 bed will be rented out by at least 3 people but more often 4+. A private owned by a couple with a child so less use. If landlords sell you have less accomadation available overall and less rental. If you force them out of the market it will all be worse. That is much more pressure on renters. Many landlords are also in negative equity so it would cost them more to sell than subsidise the tenant.
@Kal Ipers:
Maybe it’s time for you to evade those 50% taxes by entering the grey market.
The greed is taking hold again.
@Padraig: government greed? My rental income is taxed at over 50%
@Hello there friend:
Maybe it’s time for you to evade those 50% taxes by entering the grey market.
This is actually very frightening.
The insecurity that so many people must feel every day while they are renting family homes.
Why are they not tackling this.Simon Coveney is not just getting anywhere it seems.This is a huge crisis.Its getting worse by the day.
And these diversions over bloody hospital ownership is suiting the likes of coveney to divert attention.This should be the NO 1 priority.
Economy is overheated, pretty soon the regular 6:01 news will have bertie on, and asking him why we havent git enough houses.
@Ben Coughlan: actually seriously underheated, the reason there is so little being built is that it’s not cost effective to buy a site, develop it for housing and build on it as there are still being houses being sold for less than what it would cost. Throw into that the fact we have 500k more living here than the height of the boom plus the lack of supply over the last 10 years and the bottleneck of first time buyers and you start to get an idea of what we are facing. If you think the price of houses were high in the past, you ain’t seen nothing yet!
This is what happens when you have open borders. If you are letting hundreds of thousands enter and live in the country you’d better have a housing plan to go with it. The only people at fault here are the idiots in charge and the people who keep voting them in.
@SteveW: If you look back you will see the ERSI warned of the situation we are in now and that building homes should be a priority. The comments here were all laughing about how riddiculious it was to suggest it. Generally the public didn’t want any plans to build because they though it would create a bubble. There is no political will without pressure so blaming politicians is only half the truth. Pretty hard to do the smart thing if you would get voted out.
AirBnb has a massive role to play in this. Landlords get greedy and take advantage. Sydney has v fair system where fair trading hold the deposit and hold the landlord accountable for the state of the property etc. You can even challenge them on the price of the rent.
In Ireland it’s just everyone out for themselves and they get away with murder.
@Trevor W: Some are already complaining about people coming to Ireland. They would be happy like a shop assistant delighted while not bothered by any customer for all day long. Surely we can live on tax dodging only, can we ??
@Trevor W:
Sydney has a YUUUGE real estate problem (price and quantity).
With Brexit and stopping migration into Britain I suppose a lot more ppl will be coming to Ireland …finding any were to rent will be near impossible
Loads in the west…€500 a month for 4 bed house…and life’s not too bad either (if over 35)
Sounds like it’s in the middle of nowhere Soccer with few jobs?
Surprise, surprise. Rent control didn’t work. Taxing landlords at 52% didn’t work.
How did anyone think you could increase supply by discouraging supply?
I know the AAA etc thrive on misery, which is why they advocate homelessness through rent control – there are votes in poverty. But I am surprised at FG putting through such a leftist populist control.
Government has been watching this slow motion car crash unfolding for almost 4 years now.
So they’re reaction or inaction as is apparently the case seems to be design .. They’re suicidal.
Starting to think FG see rents as a replacement for stamp duty taxes…anyone have any figures
or a guesstimate at total revenue take on rental income?
Doing well with my 3 bed house for 560.
@JohnPaulMcQueen: good for you JP, I only wish more people were in the same boat..
@Ben Coughlan: He said it’s a house.
@JohnPaulMcQueen: aran islands?
@JohnPaulMcQueen:
LOL, where do you live ?! :)
I wonder what percentage of property is owned by outside venture capitalists and to what extent they see driving this….
Best little country in the world to be a landlord in; worst little country in the world to be an urban teanant on.
Rent and mortgages of residential property are the primary means by which wealth is channelled up to a super wealthy class.
Thomas Piketty is right.
@Tony Daly: oblivious of the fact we have some of the worst protections for landlords and tax is very high.
@Dilly Dong: Don’t know what you are reading but landlords have been leaving the market at a large rate. It is very difficult to get a buy to let mortgage now too. Investment funds pay much lower taxes and can afford wayward tenants. It is a good investment for them due to tax breaks. Small time landlords are being pushed out.
The next leader of FG is doing a great job in creating homelessness
I will go back to basics and but up a shelter in a forest, see how long the gardai take to haul me out when it is viewed as a Asset, not a roof over my head.
Fg labour government really messed up,and did not care.its time politicians earned their over the top salaries, represent the Irish people.
FG are waging class warfare on ordinary people through allowing this.
1,130 same price as morgage of 3 bedroom semi in 2004 how do you ever hope to save for a morgage at the rate ,
What a farce the housing situation is in this country. We’re coming out of a recession, supposedly, but the cost of living has shot through the roof, while wages remain the same. Quality of life will plummet for those on low wages, so there will be more of an incentive to be unemployed & apply for social housing, than there is to work, for many people. It’s a tragedy. In relation to the property bubble that is being created again/already here(!!), we the people should have learned the first time round.
“Fool me once, shame on you, fool me twice, shame on me!”
@Pheilum Shannon: property bubbles rely on oversupply and we are under supplying. This is a different situation made worse by people thinking it is the same.
@Kal Ipers: This is also a property bubble, just not caused by credit this time. The prices are so high because the supply is too low, so what would happen to the house prices if the supply and demand start to level out? When the prices start to drop people want to sell asap, this increases the supply even more and pop goes the bubble.
How long does it take to provide supply? It is hard to get credit so that isn’t causing anything as cash purchases are very high. Demand is ever increasing. Supply is no where near matching demand and is not increasing.
What you described was what was happening back in the 00s. It is not what is happening now. The entire housing supply has changed as a result of the crash. If you are in your 40s without a property you are very unlikely to get a mortgage. That means you rent so what was a transitional position is permanent and requires more rentals in the market. Homeownership rates are now changed forever.
I think a law should be passed that anybody who takes up office or a seat in the Dail can’t have assets which could gain or decline with decisions that have to be made for the State…
I.E
Landlords don’t have a say in decisions to do with the housing crisis
Ah sure, it’s all good in the hood according to FG/FF. 6.8% unemployment, economy is now the fastest growing in the EU. But where are we meant to live!? It’s all well and good having a job, but what’s the point in working if there are little or no prospects of finding somewhere affordable? Fair enough, people could move out of Dublin, but what if you don’t have a car? Transport links need to be VASTLY improved, and Ireland needs join the 21st century by building UP instead of out.
For many people I speak with, affordable housing is the issue. There seems to be little problem building student housing with through-the-roof rents.
Do they really think companies will move from London to Ireland because of Brexit, why would you relocate to a country that has no housing, no decent public transport, one of the worst health care systems in Europe, schools ruled by the church and no proper infrastructure.
But we speak English, just like every other educated European.
To grow as a country you have to invest, Ireland didnt do this and now it’s too late.
With at least 25% of those charged with dealing with housing and homelessness being TD’s who are private landlords and estimates that it’s really between 40-50% of them are they really going to do anything to upset their investment portfolio. Are they fcuk
@Daithí Uí Ciarmhic: Yet taxes were increased on landlords and a rent restriction that is punitive came in. There is quite the opposite of protecting landlords.
@Kal Ipers: altogether for the poor landlords ahhhhh
@Daithí Uí Ciarmhic: Do what you like but if there are no places to rent the situation will get worse. They won’t be homeless. You want affordable rent you need it to be affordable for landlords.
Minister for housing is playing a blinder!!
Just tax unoccupied homes in the rent pressure zones. It is easy to find them now, because of the LPT.
Then offer a straight grant of €40k for all completions before end 2019, extended until 2020 for apartments.
@Kal Ipers: I read your comments and I can’t believe you try to defend landlords as they are not part of the system, just victims.
There are different types of bubble. Specultion can also be produced with low supply. Its only a matter of how the market is considering average prices.
So, dont come with this fake speech speech of numbers and taxes cos is not fair. Or even honest. Bring all the info, for both sides.
The tax werent at 52% and the prices were crazy anyway.
Unless u are a landlord there is no meaning to protect on side.
Have you ever think about have limits on price? Its ok for me reducing the tax since there are limits for rent prices. REAL ONES.
Considering bedroom number, area size or whatever could technically be. But reasonable prices.
This could be done by state. This is exactly what left wing governments do. More state.
Then, should be, at least on fair reasons
@Gustavo Rocha: There is nothing fake about what I have said. Tax is 52% on landlords and if self employed it can be 53%. A bubble requires oversupply that will never change. A speculative bubble requires this the same as any other. Unless you are about to stand up and pull out housing that won’t change.
Claims the government are being nice to landlords is laughable. In the last 10 years the government have done nothing for landlords other than increase taxes. That is while leaving them open to abusive tenants and scammers. If you want rental property insuring supply is key. No point in investing in rentals now so further restricting supply. Incompetence is the governments measures and everyone is suffering.
@Kal Ipers: what I mean by fake arent the numbers but the falacious approach that says landlords are victims and not part of the issue.
Lets say: the government reduces the tax from 52% to 10%. Tell me that landlords will reduces rent prices to 50-60% of previous price. Just tell me that.
Without intervention? No way.
See the supply is the macro picture but there is small points on it you cant see or dont wanna expose.
Low supply is only one type of bubble but this is not the case. Could have a low supply crisis even with low prices. Its a matter of how the parts respond to it.
The truth is: Ireland had a second chance. To learn with previous crisis, to learn with other countries but decided to go in a different way.
I have seen this before in different countries not only in theory and can tell u for sure: not a good future!
The history has cycles, the economy has cycles. At some stage the money stop to come from everywhere. The country has to be ready for this equalization
The rental model needs to change.
I think it’s fair to expect for 1300 euros a month a good quality warm comfortable property.
It’s important I think to understand that at 1300 euros a month – a tenant is paying out 312,000 euros over 20 years.
This assumes NO increase at all yet the landlord can increase each year by 4 percent.
The tax situation needs to be looked at for landlords. It’s too high .
However depending on random people to supply housing is flawed. What you want I think is people genuinely interested in delivering long term sustainable accomodation.
The way to look at it is that you don’t lease cars through a guy on done deal who only does this as a bit on the side.
Yet that’s how we rent houses and then we scratch the heads wondering why we’ve a problem.
Excellent ad for Austen Egan in Kilcullen!!!!
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