‘Government’s strategy has failed’ as rents rocket up 10%
‘Strong demand, weak supply’
THE average monthly cost of rent soared by €116 over the last year, a new report revealed.
The increase – more than 10% – has sparked criticism of the Government’s Rent Pressure Zones.
Experts are openly questioning if the rent control measures, brought in to cool the market in 2016 as increases spiralled, are working.
The average monthly rent nationwide at the end of last year was €1,227, the seventh quarter in a row in which a new all-time high has been set. However, the annual rental rate of inflation has slowed from its fastest ever rate – when it hit 13.5% in 2016 – according to the latest quarterly rental report by property website daft.ie.
The report author, economist Ronan Lyons, of Trinity College Dublin, said: ‘It would be hard to argue that the rent controls are working because they’re supposed to kick in when rent inflation is above 7%. It was to bring rent inflation down to 4%.
‘But there’s almost no market in the country where the rate of rent inflation is below 4%. I think Donegal is the only one and almost everywhere is above 7% as well.’
Mr Lyons said there are not enough proper controls in place for the measures to work. ‘But for me the reason they are not working is related to the reason they were brought in,’ he said. ‘Because demand is so strong and supply is so weak, if you’re a tenant at the front of the queue, you’re most unlikely to then start putting the landlord through their paces, getting them to prove the rent is only 4% higher. Instead you’re just going to say, “I don’t care what the last guy paid, I need somewhere to live, I’ll take it”.’
Niamh Randall of homelessness charity Simon Community’s said: ‘Rent Pressure Zones and other measures cannot work without proper monitoring and enforcement by the Residential Tenancies Board. Tenants cannot be expected to “police” this private market when they are clearly at such a huge disadvantage with continuously diminishing supply and rising prices.
‘Non-compliance with the RPZ legislation by landlords is leading to higher presentation rates to emergency accommodation services and this has been acknowledged by [Housing] Minister Eoghan Murphy.’
There are 21 RPZs around the country. The areas are greater Dublin, Galway, Cork, and parts of counties Kildare, Meath, Wicklow and Louth.
When an area is named an RPZ, increases are capped at 4% per year over a three-year period. In Dublin, the increase in rents in the year to December 2017 was 10.9%, and rents in the capital are now 26% – or €4,500 a year – higher than their previous peak in 2008.
Most of the other major cities saw similar changes in rents during 2017. In Galway and Waterford, rents rose by a little over 12% during the year, while in Limerick, they increased by 14.8%. In Cork, the increase in rents was 7.7%, while outside the five main cities rents rose by 9.8%.
There were 3,143 properties available to rent nationwide on February 1. This is the lowest number the reports have recorded for this time of year since they started in 2006, and marks a 15% decrease on the same date a year previously.
In Dublin, there were fewer than 1,350 homes to rent, compared to almost 6,700 on the same date in 2009.
Social Democrats co-leader Catherine Murphy TD called on the Government to introduce nationwide rent caps.
‘It is now beyond time for the Government to face facts: Rent Pressure Zones have failed and the only way to make rents affordable is to apply proper rent certainty measures,’ she said.
Comment – Page 12 christian.mccashin@dailymail.ie