Sunday 25 September 2016

The extremes which show the two-tier rental market

Published 13/06/2015 | 02:30

In Waterford city, a three-bed apartment can be rented for €344 a month, making it the cheapest location in the country for this type of property.

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With a riverside location, and within walking distance of Waterford Institute of Technology and the city centre, bedrooms are typically en-suite and free parking and broadband are often provided.

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The most expensive apartment in the country is in sharp contrast, not for the range of amenities within walking distance, but for the price.

A three-bed unit in Ballsbridge, Dublin 4, costs €2,070 a month - almost seven times that in the south-east.

It is the extreme price differences which perhaps best tells the story of Ireland's two-tier rental market.

The Rent Report shows that across all property types - ranging from a one-bed apartment to a four-bedroom detached house - the top prices are being paid in Dublin. The three-bed apartment shows the widest difference, but of 14 property types surveyed half command rents which are five times more expensive in the capital.

They include the most expensive home, a four-bed semi-detached house. These redbricks are typically found on older streets in Dublin 4, and fetch an average of €2,355 per month, or €28,260 per year.

Given that housing costs average 20pc of salary after tax, those prices suggest the residents are earning in excess of €141,300 per year.

It's no surprise that some of the cheapest properties are available in counties where lucrative tax breaks were in place during the boom years.

Glut

Not only did this fuel property construction, which has resulted in a glut of homes now fetching modest rental prices, it has also left a legacy of ghost estates which are still being addressed. Those counties include Leitrim, Longford and Roscommon. Others which feature are Donegal and Kerry.

Landlords in many of these counties will be worried that their investment may never pay off. The problem of low rents, which may not even be servicing the mortgage, is compounded by the flight of young people to the bigger cities and abroad in search of work.

This means that unless there is inward investment and an upsurge in job creation, these rents may remain low for the foreseeable future.

Property types in just two cities are at the bottom of the market. Waterford, and the Dock Road in Limerick, where a four-bedroom apartment costs €390 per month.

However, plans are in place to regenerate the Limerick Docklands, which should help increase rents and provide some relief to landlords.


What's the real cost of renting in your area?

Irish Independent

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