Monday 17 December 2018

IDA plays down rental crisis with '€1,000-a-month' apartment claim to multinationals

  • IDA seeks to play down the state of housing crisis to multinational companies
  • Executives advised to tell prospective investors that housing shortage was 'not unique to Ireland'
  • Brief advised executives to stress to companies that monthly rents in Dublin were 'still competitive by international standards'
  • Residential Tenancies Board says standardised average rent for Dublin stands at €1,587
A view from above of O'Connell Bridge. Stock picture
A view from above of O'Connell Bridge. Stock picture

Ken Foxe

The IDA has sought to play down the state of the housing crisis to multinational companies.

Its executives were advised to tell prospective investors that the housing shortage was "not unique to Ireland".

A series of briefing documents also advised IDA executives to stress to companies that monthly rents in Dublin were still competitive by international standards.

It claimed the rent for a small "one-person apartment" in Dublin was just above €1,000 a month.

This was almost half the price of rent in San Francisco, and significantly less than other major cities such as New York, Hong Kong and London.

The documents were drawn up after multinational companies raised concerns over "constraints" and "clear market failures" in the residential property market.

The IDA briefings included rent data from the Nestpick Furnished Apartment Index.

The briefings for the IDA also emphasised that rents in regional locations in Ireland were "very competitive".

While the standardised average rent in Dublin was €1,436 a month, the average in Cork and Galway was just over €1,000. In Waterford, it was just €674.

However, according to the Residential Tenancies Board in the second quarter of 2018, the standardised average rent for Dublin stood at €1,587, representing an increase of €128 on average monthly rent over a 12-month period. Nationally, rents grew at 7.6pc annually in that quarter.

For property purchases, the briefing said that average residential prices in Dublin - at just over €400,000 - were "competitive compared to competing larger cities".

Average property prices were at least 50pc higher in Paris, Zurich and Geneva, according to the documents prepared by the IDA.

Ireland did not compare so well to cities such as Milan, Prague and Frankfurt however.

"Regional cities compare exceptionally well to other competing cities," the briefing said, with average prices in Cork and Galway below €200,000.

The briefing also said there were "hugely positive trends" in the residential property market. It said that first-time buyers in Ireland were in a much better financial situation now than they were at the height of the boom.

"The average first-time buyer working couple uses 21.2pc of their net income to fund a mortgage in Ireland - this was 32pc in 2007," the briefing explained.

The briefings are based on a series of quarterly housing reports commissioned by the IDA from estate agents Lisney.

The reports were started because of concerns from companies about the Irish property market.

"Our clients operate in an international context and it is IDA Ireland's role to consider how we compare to our competitors," the IDA said.

Irish Independent

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