Rents have gone up by €100 a week in four years
House rental costs have leaped by almost 50pc from 2011 to 2015
Published 14/02/2016 | 02:30
Average rents soared by more than €100 a week in Dublin city between 2011 and 2015 and will continue to rise for the next few years unless urgent action is taken, a leading economist has warned.
The spiralling cost of renting houses and apartments is now a national phenomenon with all major urban centres experiencing major hikes.
At a time when close to one in three Irish citizens is a tenant, the average rent for a two-bedroom apartment in Dublin city and county soared by an average of 46pc over the four-year period and was on par with Celtic Tiger levels last year, even though the economy is still in recovery mode, according to the new figures from the Irish property website Daft.ie.
People renting a two-bed apartment in Dublin's city centre saw the highest rise of 51pc, followed by 48pc in the north city, 47pc in the south city and 45pc in west Dublin.
That meant that over the four years, tenants in Dublin city centre had to find an extra €100 a week for a two-bed apartment.
In 2011, the average monthly rent bill was €906. By the fourth quarter of last year it had risen to €1,364.
Average rents for three- bedroom houses in the greater Dublin area rose on average by 42.5pc, with the greatest increase in the city centre at 49pc, followed by the north city at 44pc and the south city at 43pc. While increases weren't as dramatic beyond The Pale, areas outside Dublin also saw significant rent hikes.
Rents for a two-bed apartment in Cork rose by 30pc over the same period and by 26pc for a three-bed house. Rents in Galway rose by 28pc for the same size apartment and 24pc for a three-bed house, while in Limerick they rose by 21pc and 18pc respectively, and 11pc and 8pc for a two-bed apartment and three-bed house in Waterford.
An analysis of Daft.ie's latest rent survey, conducted in the last quarter of 2015, reveals that rents in some areas have now exceeded those during the peak of the boom in early 2008.
A three-bed house in Galway now costs an average of €877 a month - 5pc more than in the first quarter of 2008 - up from €705 in 2011. The same size house in Dublin's south city now rents for an average of €1,659 a month, or 1pc above peak levels.
While escalating rents have made headlines over the past few years, the sheer scale of the combined rent hikes between 2011 and 2015 will come as a shock to many renters, many of whom have been forced out of the market, some into outright homelessness.
"It's now right back to where it was before the crash," Ronan Lyons, economics professor at Trinity College and chief economist for Daft.ie, said of average rents in Dublin, Galway and Cork.
Yet the market forces that led to a perfect storm for escalating rents - namely an acute lack of supply and sky-rocketing demand - are still there and are getting worse, he told The Sunday Independent.
Unlike elsewhere in Europe, Ireland's population is growing at a steady rate, which puts even more pressure on the housing market, he said. At the same time, the lack of new construction over the course of the recession, and a very tight residential rental market is making it very difficult for would-be renters to find a rental unit at all, let alone one that is affordable, Mr Lyons said.
There were less than 3,600 properties advertised for rent on February 1, 2016 compared to 20,000 advertised on the same date in 2009.
An additional 100,000 units are urgently needed to come on stream to meet demand, he said. Yet even if they were built tomorrow, it would still take about 18 to 24 months for the supply to meet current demand before prices start to level off, he claimed.
"Change will be two to three years' coming," he said