Rents have risen by 70 per cent since bottoming out in the recession and are now 23 per cent higher than their Celtic Tiger peak, according to a new report.
The study shows rents increased during the first three months of 2018 – the 23rd quarter in succession – as the number of rental properties available nationwide continued to decline.
Daft. ie's latest quarterly rent report shows rents rose 11.5 per cent nationally in the year to March and were up 2.8 per cent on a quarterly basis. This marks the largest first-quarter increase since 2014.
Do we need any more evidence to that the cult of property is destroying this economy and quality of life here?https://t.co/OY8llNIbol
— David McWilliams (@davidmcw) May 4, 2018
The average rent across the State during the first three months of the year was €1,261, a monthly increase of €232 compared to the previous peak in 2008.
Commenting on the latest figures, Dr Ronan Lyons, assistant professor of economics at Trinity College Dublin and author of the report, said rents across the country were considerably higher than in a decade ago despite general prices having barely changed during the same period.
‘Chronic and worsening’
“It is clear that, for those who have to look for a new home in the open market, rental inflation remains well above any reasonable measure of health. But as ever, rents are only the symptom,” said Dr Lyons.
“The cause remains a chronic and worsening lack of rental supply. Policy must focus on dramatically increasing the construction of urban apartments over the coming years, in order to meet both the backlog of demand and the country’s needs over coming years and decades,” he added.
In Dublin, where the accommodation crisis is particularly acute, rents are now 30 per cent higher than their previous Celtic Tiger peak.
Rents in the capital rose by 12.8 per cent over the year to March. Other urban centres also showed significant increases with rents up 17.1 per cent in Limerick. In Waterford, the rise was 14.6 per cent while in Galway and Cork, prices rose by 13.6 per cent and 9.3 per cent respectively.
Outside the five main cities, rents were up by an average of 10.1 per cent.
Nationwide
According to Daft, there were 3,200 properties available to rent nationwide in the first four months of 2018. This is the lowest number ever recorded for this time of year by the website, and marks a 17 per cent decline versus the same period a year earlier. In 2009 by contrast, an average of almost 21,000 properties were available.
In Dublin, there were just 1,265 homes available to rent last month, one-third below the average over the last five years.
The country needs close to 50,000 homes a year to cater to underlying housing demand with more than 15,000 rental homes required a year.
Dr Lyons said the latest figures would not be welcomed by policymakers given that they show the introduction of rental increase caps in cities have failed.
“By focusing on limiting rent increases, rather than boosting the supply of rental accommodation, policy is merely shuffling the fixed stock of rental homes between a number of tenants and prospective tenants,” he said.
