Sunday 4 December 2016

Families squeezed out of rent market

Published 01/07/2015 | 02:30

Niamh Randall of the Simon Community and Ronan Lyons, Assistant Professor of Economics, Trinity College Dublin
Niamh Randall of the Simon Community and Ronan Lyons, Assistant Professor of Economics, Trinity College Dublin

One in 10 people looking to rent a home is being priced out of the market.

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More than 70,000 families reliant on State payments to pay for their housing cannot secure a house or apartment in some areas because market rents are way in excess of the Government supports being paid, the Simon Community said.

Spiralling costs were also pricing out well-paid workers and families, Trinity College Dublin economist Ronan Lyons added.

Rising rents were being driven by high construction costs and onerous building standards, resulting in developers being forced to seek high rents to cover the cost of construction.

Mr Lyons said people earning €45,000 a year could require some form of State help to pay their bills as prices rise due to a housing shortage.

Rents would continue to rise unless building costs were tackled, and local authorities were prepared to allow smaller units to be built, he added.

It cost almost €260,000 to build an 80 square metre, two-bedroom flat in Dublin. The 'break-even' monthly rent for the developer was €1,296.

People earning €45,000 a year should pay no more than one-third of their income on housing, meaning the maximum they could pay was €1,000. This meant a subsidy of €296 per month was required.

If the size of the unit was reduced to 60 square metres, the break-even rent would fall to €797, meaning affordability would not be an issue.

"Minimum standards in Dublin means homes will only become available for those on six-figure salaries," Mr Lyons said.

Irish Independent

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