Wednesday 17 July 2019

Rental crisis: Monthly costs soar to 7pc more than previous peak - before 2008 crash

Rent zones fail to stop monthly costs rising close to 10pc

The rental crisis intensifies
The rental crisis intensifies

Gareth Morgan and Kevin Doyle

The introduction of Rent Pressure Zones has failed to prevent the monthly rental costs facing tenants spiralling by almost 10pc in a year.

The Residential Tenancies Board (RTB) shows the national standardised average rent for new tenancies was €1,056 a month - which is an annualised growth rate of 9.5pc.

According to its Rent Index for the third quarter, in Dublin the average rent stood at €1,518, while the average for the Greater Dublin Area (Meath, Wicklow and Kildare) was €1,086.

Outside of the Greater Dublin Area, the average was €811. Rents were 7pc above the previous peak recorded at the end of 2007, before the crash.

Rosalind Carroll
Rosalind Carroll

It comes as the RTB launches an awareness campaign calling on landlords and tenants to ensure rents are in line with the law. There are 21 Rent Pressure Zones around the country, where rent increases are limited to a maximum of 4pc annually.

RTB director Rosalind Carroll said the rising rents reflect the continued lack of supply - a view at odds with that of Housing Minister Eoghan Murphy, who said supply was increasing.

"Strong demographic and economic growth matched with low levels of supply are continuing to put significant pressure on the private rental market and those trying to find a place to live," said Ms Carroll.

"This is the third Rent Index report published since Rent Pressure Zones were introduced one year ago.

"Despite a moderate slowdown in the pace of growth in the first quarter of 2017...rents are continuing to trend upwards, with an increase in the pace of growth in quarter three.

"These findings reflect the unprecedented situation of continued low supply of properties and high demand in a volatile rental market."

She said it was important to note that the index was reflecting new registrations, rather than existing rentals, and that in Rent Pressure Zones the index includes dwellings that are exempt from rent restrictions.

Reacting to the figures, Mr Murphy said the RPZs were being kept under review.

He said: "Q3 was the period before we announced some enhancements, for example, the definition of substantial refurbishment and in what circumstances this cannot be used to increase rents above the 4pc threshold.

"There was an increase of 6,000 new tenancy registrations over the previous period, which likely points to an increase in supply."

Irish Independent

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