Housing crisis: Rental costs doubled over a decade as chances of under 30s buying a home diminishes

Average monthly rent now €1,443 with biggest nationwide increase in three years despite fall in Dublin

The cost of renting has doubled in the past decade. Photo: Andy Dean Photography

Charlie Weston

The cost of renting doubled in the past decade as the crisis in housing supply and affordability deepened.

The unrelenting increase in rental costs nationwide is reflected by the largest rise in three years, despite a fall in Dublin.

Rents shot up by 2.1pc in the first three months of 2021 compared with the previous quarter, according to the latest Daft.ie report.

The average monthly rent stood at €1,443, which is almost double the €742-per-month average of late 2011.

High rents are one of the factors this week identified by the Economic and Social Research Institute (ESRI) for the collapse in prospects of younger people buying their own home.

The chances of younger people buying before age 30 have halved from a generation ago.

It means people in their 20s and 30s will be the first generation in Ireland to be poorer than their parents.

Stagnant wages and rising accommodation costs have led to a sharp fall in home ownership levels.

Lower homeownership has forced more young people into the private rental sector where they face surging costs.

The latest rental figures from Daft.ie show that Dublin rents rose between December and March, but they are down by 6.5pc when compared with a year ago, at an average of €1,974.

Supply in Dublin was up 20pc. Owners have taken properties from the short-term lettings market, such as those offered on the Aibnb platform, to rent them out.

This, combined with a temporary halt to people moving to the capital, has pushed rental costs down in Dublin.

There were just under 2,500 homes available to rent in Dublin at the start of May.

But outside our biggest city there has been a surge in rental costs, up by 7.1pc in the first three months of the year compared with the same period last year.

This means renters are paying €900 extra a year.

Lockdown ground the rental market to a halt, with fewer listings pushing the cost of rents further up.

Outside Dublin there were only 1,150 rental units available on May 1, which was down one third from the same date in 2020.

Cork, Galway and Limerick cities saw rents rise by 6pc in the past year.

In Waterford they are 8.3pc higher. Outside the five main cities, rents are up 7.3pc year-on-year.

Report author and Trinity College Dublin economist Ronan Lyons said: “The impact of Covid-19 on Ireland’s rental market was largely to send Dublin and the rest of the country in different directions.

“In Dublin, additional supply moving over from the short-term lettings market, coupled with a temporary halt to people moving to the city, pushed rents down.”

He said that as normal life resumes, the chronic undersupply of new rental homes will be the main driver, along with economic and population growth.

Prof Lyons, however, opposes calls to limit the role of cuckoo funds in the property market.

“Limiting the ability of professional landlords to invest here will worsen, rather than improve, the situation.”

He said the doubling of rents over the last decade is proof that Ireland needs to build tens of thousands of new rental homes over coming years, with funds helping to finance this.

We need professional landlords to invest in this country’s property market, he added.