Rents higher than in boom while wages have not returned to 2006 levels
Published 24/08/2015 | 02:30
Rents in cities have hiked to exceed those charged in 2006 when the property prices were at their peak, the Irish Independent can reveal.
A comparison between today's Daft.ie data and that released by the same organisation in August 2006 shows rents in many city areas are now higher.
This is despite 2006 being the year when properties were priciest and just before the crash kicked in. The average overall rent for Dublin was reported at €1,150 by Daft.ie in 2006, while today this figure stands at €1,368 - or an increase of 19pc.
Elsewhere, the average rental figure overall for Cork city now stands at €889, whereas Daft reported an average rent of €850 in 2006. This represents an increase of almost 5pc.
The 2006 average rent figure for Limerick city was reported by Daft.ie in 2006 at €700, today that figure is €718. Galway city is up from €850 to €889.
In 2006 a two-bed home in Dublin 4 rented at €1,495 but today the same property has moved up to €1,636 per month - a jump of 9.5pc on the boom-year figure.
The 2006 cost of renting a two-bed in Dublin 2 was €1,460 in 2006, but today the rent for such a property stands at €1,587 - a hike of 8.7pc.
A similar property in south county Dublin cost €1,288 in June 2006 but today it rents out at €1,340 - an increase of 4pc on nine years ago.
Elsewhere in Dublin, rents continue to close tightly on boom era figures but have not yet exceeded the 2006 rents.
For example, rent in Dublin 10 for a two-bed property stood at €1,066 in 2006 and stands at €980 today.
In the north county area, rent for this property type was €1,066 in 2006 and is now ranging at €950. Similarly, the 2006 figure for west Dublin was €1,094, while today it has climbed up to €967.
While property prices peaked in 2006, the highest rents before the economic crash were achieved in 2007.
But there is steady growth predicted in rents this year, with no supply coming on board to satisfy the demand and city populations continuing to increase.
This means it is likely that rents will exceed the highest-ever levels experienced in Ireland, over the coming 12 months.
Reacting to the comparisons, Pat Davitt of the Institute of Professional Auctioneers and Valuers said: "It's no surprise that the rental market has gotten to where it is at because all the time we're hearing about people who can't buy property being pushed into the rental market.
"The Central Bank's new lending regime has much to do with this.
"It doesn't surprise me if rents are surpassing 2006 levels. Unfortunately, while rents continue to increase, most people are still earning less than they were in 2006."