Commuter belt rents soaring as families want spacious homes
Published 13/06/2016 | 02:30
Rents are soaring at more than twice the national average in the commuter belt, as families seeking a larger property with a garden clamour for a suitable home.
The cost of renting in areas within driving distance of Dublin, Cork, Galway and Limerick has resulted in monthly costs rising by as much as 19pc over the past 12 months.
While high demand for rent has traditionally been confined to the cities, the new trends mean the areas dubbed 'Deckland' during the boom are now turning into 'Rentland'.
A lack of suitable properties available in the cities and tighter restrictions on mortgages is forcing families further out. Rising rents overall are cutting into disposable incomes.
Despite being forced to endure longer journeys to work, many families are now moving out and renting in order to secure a larger home, data reveals.
A four-bedroom detached house costs almost €940 per month in Navan, which is less than an hour from Dublin's O'Connell Street.
This compares with a similar property in Dubin 15, about 30 minutes away, which costs €1,430, official figures show.
Over the course of a year, that equates to a saving of almost €6,000.
The "chronic" under-supply of housing in key urban areas is cited by the Government as a key risk facing Ireland as the economy returns to growth.
It is now more expensive to rent a home in Dublin than it was at the height of the boom in 2007 - prompting many families to move out.
An analysis of rental data from the Residential Tenancies Board (RTB) shows that the highest rent increases over the past year were seen in Meath and Louth, followed by Laois.
In the last 12 months, prices nationally are up 8.6pc, and the increases are actually slightly higher outside of Dublin.
An in-depth analysis of the Rent Index by the Irish Independent shows that, in some commuter areas, the increases are more than twice this.
Based on the average cost of renting a home, across all types, the figures show:
l The average price paid for a rental property in Kildare rose 8.2pc in the last year to €926. However, increases are as high as 15pc in Kill, where a home now costs €1,012 - up €134 compared with a year ago. Properties in Sallins and Naas are 11pc more expensive.
l In Wicklow, prices rose 6.7pc but reached a high of 9.5pc in Rathnew, where renting a home is €895 per month.
l In Meath, rents rose an average of 11.7pc, but increases of 15pc are recorded in Stamullen (19pc), Duleek (17pc), Enfield (16pc) and Bettystown (15.6pc).
l In Louth, the highest increase is recorded in Drogheda, where a home costs an average of €770, up 13pc.
l The increases are not just confined to the Dublin commuter belt. Prices have risen by an average of 4.8pc in Limerick, peaking in Castleconnell at 12pc.
l In Cork, five areas - Rochestown, Ballincollig, Douglas, Midleton and Montenotte - have experienced double-digit growth of more than 10pc. This compares with county average hikes of 7.3pc.
The Rent Index is compiled by the Economic and Social Research Institute (ESRI) on behalf of the RTB.
ESRI senior economist David Duffy said: "People are looking at the cost of renting in the main urban centres, which, given the rate of increase, has become quite expensive. It's taking up a significant proportion of disposable income.
"It's either become unaffordable for some people, or they're looking at the value of it. It may also come down to availability as well. When you combine all those factors, you may well be getting people out to the commuter belt."
While families will save money on rental costs, they will have to bear the brunt of higher travelling costs and securing school places, Mr Duffy added.
"There's the impact on travel and commuting, schooling and childcare," he said.
"A couple who have a child and [are] about to have a second can see the value compared to what they could get in the urban centres.
"The fact [is] that rents are going up, demand is shifting and you could be seeing a move to the commuter belt. It does point to the issues, which have been well flagged, including supply and the need to have a stable housing market."
The Government's National Risk Assessment last week warned that the lack of housing, with associated high prices and rental costs, pose a risk to Ireland's competitiveness and attractiveness for inward investment.