We are becoming a nation of renters, but at what cost?
Whatever about annual increases averaging almost 9pc, it’s the sheer amount of money required to rent a home that perhaps demonstrates the appalling mess the rental market is in.
A modest two-bed apartment averages almost €960 per month, but ranges in price from €335 to €2,150.
A three-bed semi-d is €855, but average rents well in excess of €1,000 are not uncommon.
The fact that up to 40pc of income is needed to secure a home is unsustainable, both for individuals and society as a whole.
With rental costs so high, how can people spend money in the wider economy or, indeed, save for a rainy day? How can we attract inward investment when basic shelter can gobble up so much disposable income?
The Residential Tenancies Board says that people are staying longer in rented accommodation, such is the dearth of properties available for purchase. With little activity in the construction sector, the situation is unlikely to change any time soon.
Last year, less than 13,000 homes were built. So far this year, work has begun on just over 2,000.
If current trends continue, we should not expect a sufficient number of new homes to meet demand to come onto the market any time soon.
This time next year, it’s highly likely we’ll be talking about even higher rental costs. And the same people will see their dreams of home ownership fading even further into the distance.
The ‘Rent Report’ has highlighted that families seeking a larger home with a garden are moving to the suburbs and commuter counties in search of better value. There is a sound logic to this, whatever about the longer commutes and extra costs involved, coupled with the loss of leisure time.
But there is something wrong when people seeking a relatively modest house are forced to move due to affordability issues. Not everyone is living in Dublin 4 or other expensive areas. What many are finding is that even in ‘normal’ parts of the capital, Galway, Cork and other cities, the cost of renting their chosen property is either unaffordable, or is such poor value for money that they have no option but to leave.
The ‘Rent Report’ also highlights how students are making the trek into the cities every day because they cannot afford to secure a home. This is an appalling state of affairs.
Instead of creating a life for themselves close to university and all the social opportunities that presents, they are sitting in a car. What a waste.
The report from the Dáil Committee on Housing and Homelessness being published today may offer some solutions. While the last government pronounced itself unable to cap rent increases or introduce controls, given the public outcry about housing, this one may be of a different view.
Whatever else, it’s clear that the market is utterly broken, and that new homes are needed, and fast. It was always expected we would eventually become a nation of renters, but it was never expected that it should come at such a cost.