Coveney blames rising prices for new tenants on rent freeze
Housing Minister Simon Coveney has said the two-year freeze in rent hikes introduced by the last government may be contributing to spiralling rent costs for new tenancies.
His remarks come in the wake of the Daft.ie report showing that the average monthly cost of renting a home stands at €1,037 - the highest level on record. Mr Coveney said that the figures in the report are for new rentals and don't take into account existing tenancies where rents have been frozen. He said this has brought more rent certainty for these tenants.
However, he added: "Some people would make the case that, because rents are now frozen for a two-year period, when people are setting new rent prices they are trying to anticipate rental inflation, which has had an impact on the market."
Mr Coveney said ensuring the availability of affordable housing is "the biggest challenge for government".
His action plan for housing - published last month - contained few measures to tackle the crisis in the rental market but pledges that a strategy for the sector will be published by the end of the year.
Mr Coveney said: "I think we probably need to do more and what we'll be doing between now and the end of the year is we'll be assessing the broader rental market, consulting with all of the stakeholders to ensure that we get the balance right."
He says he wants to see better security of tenure and more price predictability.
Mr Coveney added: "Ultimately, you can decide to freeze rents in the morning but that doesn't actually solve the problem. The main problem here is that there simply isn't enough... supply so the conditions have to be there to encourage significant investment in large scale rental accommodation."
He continued: "The Irish rental market for decades, in my view, has been broken. It's either growing dramatically or collapsing dramatically... We need a much more stable rental market. But in order to achieve that, we need a significant increase in supply which I hope is what you'll see in the next two to three years."
Meanwhile, housing charity Threshold has reported a jump in people seeking its help because they are struggling to pay their rent. The organisation says 705 people in Dublin, Cork and Galway have sought its help already this year over crippling rent rises. That's a 28pc hike in the numbers contacting the service compared to the same period last year.
Threshold manager Stephen Large said: "The rate of increase shows no sign of slowing any time soon, and rents are becoming increasingly unaffordable... In extreme cases, rent increases can lead to tenancy breakdown or even homelessness."