Rents rising by 15pc, says State's biggest landlord
Published 11/08/2015 | 02:30
The country's biggest apartment owner has said rents being charged to private tenants have risen by up to 15pc.
Irish Residential Properties REIT (I-RES), which owns 1,566 apartments, is seeking to buy up to 650 more properties.
It said it is achieving rent increases of between 10pc and 15pc when leases are being renewed by tenants or when new tenants are moving into a property.
This means that renters are having to pay up to €150 more a month on a €1,000 monthly rent. The average monthly rent for the company increased to €1,364 per apartment in June.
This is up from €1,070 per apartment in June last year, a rise of 27pc.
One fifth of people rent their homes across the country.
I-RES chief executive David Ehrlich said the higher rent was due to a shortage of supply of apartments, but also to the group buying properties that command higher rents.
It has 100pc occupancy in most of its properties. The company's properties are in Dublin, including developments in Smithfield, the Docklands and Sandyford.
The company, which is quoted on the Irish Stock Exchange, bought 362 apartments in the first six months of the year.
It generated a pre-tax profit of €14.8m for the six months to the end of June on the back of increasing monthly rents and high occupancy levels.
It expects continued strong growth in earnings due to a chronic shortage of properties to rent.
Mr Ehrlich said: "Given current planning guidelines and the expense of new construction, the costs of building housing makes it difficult for the severe shortage of accommodation to be rectified over the next several years at least."
He said the company had plans to build between 600 to 650 apartments, which it anticipates being developed in the near future. He added the group has a "significant pipeline" of future acquisitions available through Nama and private off-market opportunities.
The chief executive of the housing charity Threshold, Bob Jordan, said the rents being generated by I-RES represented the higher end of the market.
For those in the lower and middle end of the market, rent rises of 20pc to 40pc were not unusual.
There was a desperate need for the Government to intervene in the market by imposing rent regulation, Mr Jordan told RTÉ News.
He said landlords were experiencing "a bit of a bonanza" at the moment when it comes to the rents that they can charge.