Rise of rent prices a bigger issue than cost of homes, according to statistics agency

Fellow bailout countries Greece and Cyprus saw rental costs fall 25pc and 3pc, respectively. Stock image

Sarah Collins

October 08 2021 02:30 AM

Modern Ireland has a rental crisis rather than a house-price problem, according to new figures from the EU’s statistics agency.

Rents in Ireland have risen at about twice the rate of house prices over the last decade, the figures from Eurostat show.

Irish rental costs have increased by 66pc from 2010 until the second quarter of this year, the third-highest rise in the EU and more than four times the EU average.

Only Estonia and Lithuania saw higher rent rises, while the EU average rise was 16pc. Most EU/IMF bailout countries have seen rents either fall or rise only slightly since they asked for financial assistance more than a decade ago.

Ireland and Portugal were the only two countries to see significant rises in rents since 2010, although rents in Portugal rose at less than half the rate in Ireland.

Fellow bailout countries Greece and Cyprus saw rental costs fall 25pc and 3pc, respectively, while Spain, which got a bank-only bailout, saw a slight increase in rents over the decade of less than 5pc.

Rents nationally rose by 7pc in the April to June period, according to the Residential Tenancies Board (RTB), despite a cap of 4pc for pressure zones that was in place at the time. The cap was recalculated in July to keep pace with inflation.

The interim director of the RTB, Padraig McGoldrick, said it pointed to an “unacceptable level of non-compliance by landlords”.

House prices in Ireland have also risen since 2010, at just under the EU average of 34pc.

Prices continued to fall after the previous financial crisis, reaching a plateau in 2012-13 before starting to rise again.

Since 2010, house prices have more than doubled in Estonia, Luxembourg and Hungary, but they fell in Spain, Cyprus, Italy and Greece, all of which (bar Italy) were in a bailout programme after the 2008 crisis. ESRI research professor Kieran McQuinn said yesterday that the Government’s shared equity scheme for first-time buyers could add to the cost of housing.

Rise of rent prices a bigger issue than cost of homes, according to statistics agency

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