Sunday 26 October 2014

Renters now paying twice as much to live in Dublin as country rates stall

Published 20/03/2014 | 02:30

Lack of homes forcing up rent

RENTERS now face paying twice as much to live in Dublin, as new figures reveal a major price-gap in the rental market.

A tightening shortage of supply has helped drive up the cost of renting all types of homes in the capital – with an increase of 7.6pc recorded over 12 months.

Yet, rents were almost stagnant elsewhere – rising just 1.1pc for the year overall.

Rents for houses outside the capital actually declined 1.5pc in the last quarter of 2013.

Overall average rent for a house in Ireland now stands at €744.

Yet, in Dublin, it averages €1,168, while outside Dublin it stands at €608.

The average apartment rent across the whole country is €844. In Dublin, it averages €1,070, while outside Dublin it is €630.

According to the latest quarterly rent index of the Private Residential Tenancies Board (PRTB), rents in the capital now stand just 15.5pc shy of what they were at the peak of the property market in 2007. Already they have returned to 2009 levels.

The big surprise, however, is that Dublin apartment rents increased by 10.5pc through the year, taking apartments above the €1,000 per month mark for the first time in more than five years.

The apartment market has become increasingly heated through the year with rents increasing by 2pc nationwide in the last quarter.

PRTB director Anne Marie Caulfield said the rent index "continues to reflect a story of significant rent rises in the Dublin region, while the 'outside Dublin' market remains much more subdued".

There has been almost no new-home construction in Dublin since the end of the boom in 2007 and the resulting shortage of supply of homes to purchase has put pressure on the numbers of homes available to rent.

EMIGRATION

Families who would normally have purchased by now continue to make up an abnormally large portion of the rental market in the capital. In contrast, regional towns still have an overhang of accommodation available and this is particularly acute in towns which have suffered from emigration of young people.

An apparent anomaly in the statistics produced for the Board by the Economic and Social Research Institute (ESRI) is the fact that the average national rent for an apartment is now actually higher than the average national rent for a house.

This reflects not only the fact that the capital contains most of the country's apartments – which often rent for higher than houses in the regions – but also the fact that the regions contain more low rental houses.

Overall the PRTB survey is likely to be the most accurate available given that it reflects actual rents being paid according to the PRTB's records – this is distinct from asking prices or advertised rents which are the basis of other rental barometers.

All landlords are legally obliged to register tenancies with the PRTB and the number of new registrations recorded through 2013 was 114,405.

Irish Independent

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