The average cost of renting a home in the Republic has increased by €134 a month over the last year, with prices in Dublin climbing by substantially more, a new report on the housing market finds.
Figures published by property website Daft.ie show that rents have increased by 13.4 per cent in a year – the second-highest jump on record. It comes as supply across the State hit its lowest level in more than a decade.
The report puts the average monthly rent in the Republic at €1,131, with rents averaging €1,784 on the south side of Dublin city, €1,690 in the city centre and €1,553 north of the Liffey.
It also suggests that Minister for Housing Simon Coveney’s Rent Pressure Zones (RPZ) – which limit rent increases in designated sectors to 4 per cent per year – may actually be worsening the housing situation for tens of thousands of people looking for homes.
"The rental market has, for over five years now, shown increasing signs of distress, with stronger demand but weaker supply each year," said the report's author, Trinity College economist Ronan Lyons.
‘Divergence’
He highlighted “a divergence between those who have long-term rental agreements and are happy to stay in their current homes and those who are either entering the rental market for the first time or looking to move from one property to another”.
For the report, Daft surveyed more than 4,000 tenants, asking them about rents paid in recent years.
“What we were interested in was examining the extent to which landlords have passed on rent increases faced by movers to sitting tenants. In other words, have ‘sitting rents’ followed the same trend as ‘market rents’?”
They did until 2013 when the two groups started diverging, Mr Lyons said.
Over the last four years, market rents have risen by just over 50 per cent while sitting rents have increased by 27 per cent.
“In other words, those who have stayed in the same lease have enjoyed a discount relative to market rents, with rents increasing by just half the increase seen on the market.”
‘Worse’
Mr Lyons suggested that the RPZ system “makes things worse, rather than better, by amplifying the insider-outsider nature of the rented sector”.
Nationwide, rents are now 10 per cent higher than at their previous peak in 2008, and have climbed 52 per cent since the lowest post-crash point in late 2011.
In Dublin, rents are an average of 15.4 per cent above their previous peak in 2008 and 66 per cent higher than they were at their lowest point in 2011. Rents in Cork City are 9.7 per cent up on their previous peak and 17.8 per cent higher in Galway City.
The report paints a bleak long-term picture for the rental sector, with less than 3,100 properties available to rent nationwide on May 1st and just 1,074 homes in Dublin City where demand is highest.
‘Worrying’
The Peter McVerry Trust, the homeless and housing charity, described the report as “deeply worrying”.
Its chief executive Pat Doyle said the situation was “unsustainable” and he expressed concern that rising rents would lead to more people becoming homeless.
The chairman of the Irish Property Owners’ Association (IPOA), Stephen Faughnan, said “Government interference” including rent controls and a prohibition on bedsits was “increasing costs and damaging the market”.
