Saturday 21 April 2018

Rents jump by 9pc over 'chronic' homes shortage

Thomas Molloy Group Business Editor

AVERAGE rents jumped almost 9pc in the past year as would-be tenants compete for a shrinking number of homes, according to the country's biggest property website.

Rents rose in every county outside Connaught and Ulster and soared 14pc in parts of Dublin.

Despite the commonly held belief that Irish people like living in their own homes, Ireland now has lower home ownership rates than the majority of countries in the European Union.

Just under a third of the population rents their home, according to the latest census figures.

And rents are now most expensive in Dublin 4, where landlords are now looking for an average of €1,189 for a one-bedroom home, while they are cheapest in Ulster.

The average rent in Dublin is €1,289 compared to €848 in Cork, €828 in Galway, €672 in Limerick and €601 in Waterford.

While the news will be a disappointment to those looking for a home it will help the country's army of accidental landlords who are often trying desperately to repay onerous buy-to-let mortgages taken out during the boom.

Rents rose in all cities with Cork and Galway experiencing a 6pc rise, Limerick 5pc and Waterford 1pc. Rents in Dublin's neighbouring counties of Wicklow and Kildare increased 9pc.

Outside of the cities, rents rose by an average of 4pc.

The average rent nationwide between January and March was €888 compared to €815 a year previously, says in a report to be published today.

A rising population accompanied by a collapse in construction and the vast number of vacant houses in the State have pushed up the cost of both buying and renting.

The number of properties available for rent outside the country's cities is now fewer than 4,000 compared to 11,000 two years ago. In Ireland's five cities, there were just 2,700 properties available to rent on May 1, the lowest figure since early 2007.

"The housing crisis in Dublin is getting worse," said the report author, Trinity College economics professor Ronan Lyons.

"The solution is not capping rents, which will limit the supply of new homes, but rather addressing the underlying problems, in particular streamlining the cost of land and of regulation."

Prof Lyons said the Government must taken decisive action to lower costs including salaries which account for two thirds of construction costs and are set by wage bargaining agreements.

"The cost of building a house is 3.3pc higher now than in 2007, he said.

"Ireland's urban centres are four years into a new housing market cycle – and yet there is still very little evidence that anything is being done about what is now a chronic shortage of accommodation in Irish cities," Prof Lyons states.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business