Soaring rents adding at least €700 a year to household bills
Published 23/09/2015 | 02:30
Tenants in the private rented sector are paying almost €700 a year more for their homes as costs continue to soar.
The Private Residential Tenancies Board (PRTB) says the average national rent now stands at €878 per month, up €58 per month on the same period of 2014 - a rise of more than 7pc.
And prices in Dublin are now just slightly under the level experienced at the peak of the boom.
The PRTB says a house in the capital costs €1,387 per month to rent, while an apartment costs €1,260. This means that tenants living in the capital can expect to pay an additional €1,300 over 12 months for a home, with prices now just 3.5pc below peak.
The latest data from the PRTB Quarterly Rent Index shows how the lack of new homes coming on stream continues to inflate rental prices way in excess of the cost of living, which has remained unchanged in the last year.
It comes as the National Economic and Social Council (NESC) today says that rent certainty is needed for tenants to bring stability to the market.
Repeated and ongoing rent increases are now becoming a threat to Ireland's competitiveness and job creation, it warns.
The data, which is based on actual rents paid by tenants and is compiled by the ESRI, shows that the cost of renting a home continues to soar, as more people join the rental market.
There are 322,662 people living in private rented accommodation. Some 21,606 new tenancies were registered in the second quarter of the year.
The data also shows:
Nationally, the average rent paid is now €878 per month, up 7.1pc or €58 per month. A house now averages €853, up from €801 a year earlier or 6.4pc, and an apartment €922, up €65 (7.6pc).
In Dublin, where demand is highest, rents have risen 9.2pc on average. A house in Dublin is 8.8pc more expensive, or an increase of €112 per month, while an apartment is up €108 or 9.4pc.
Outside of the capital, growth is more subdued, up 5.8pc. The rent for houses increased by 5.8pc to €695 while apartments are up 5.9pc to €660.
Worryingly, prices show no sign of slowing down. Average prices nationally are up 2.9pc in the second quarter of this year compared with the first, with houses up 2.4pc and apartments up 3pc.
In Dublin, they are even more pronounced. Quarterly growth stands at 2pc, but rising to 2.9pc for houses and 4pc for apartments.
Nationally, rents peaked in the last quarter of 2007 before dropping by 24pc to a trough in early 2012. Today, they are on average 13.1pc lower than peak.
The Irish Property Owners Association said that among the reasons for rising rents was that residential landlords enjoyed less favourable tax treatment than those in the commercial sector - an issue highlighted by NESC.
"The difficulty is the tax treatment of the sector, and costs that are clearly expenses are not allowed," chairman Stephen Faughnan said. "25pc of the interest paid to banks is not allowed as an expense, and therefore taxed as income, The Local Property Tax is not an allowable expense. The cost of providing accommodation has increased by up to 24pc."
Environment Minister Alan Kelly is expected to announce rental reforms in the coming weeks, which are expected to include measures to tackle rising rents.