Call to build 200 f lats every week as rents hit fresh high

IRELAND needs to build 200 apartments every week for more than 60 years just to cope with surging housing demand, an expert has forecast.

That is an extra 1.2million apartments from now until the 2080s, says property economist Ronan Lyons.

His plea comes as average rent in the country is now €1,261 a month – up 11.5% or €232 a month compared to a year ago, according Daft.ie.

Explaining his call for building more flats, Mr Lyons said: ‘It’s based on three key numbers: one is a population projection; average household size, as in the number of people in the households; and then the percentage of people that live in cities.’

He said such a scale of development to the 2080s would bring us in line with where Europe is at present.

Mr Lyons, an assistant economics professor, said: ‘They’re not an aggressive set of assumptions but it just shows you how much of sync we are with the rest off Europe in terms of housing.’

It will mean all cities and major towns will become ‘significantly’ bigger, he says.

‘One of the hopes of 15 years ago was that increased working from home would shift the balance away from bigger cities but it seems to be the opposite,’ said Mr Lyons, who works for website Daft.ie. ‘People like to be near the action, they want services, shops and cafes, music events and sporting events, the cinema, etc. But all that needs density of population and for that reason working from home accelerates people moving to the bigger towns and cities.’

The latest Daft.ie rent report warns more than 15,000 rental homes and close to 50,000 homes are needed annually to meet the surging demand for both private and social.

There were only 3,086 properties available to rent nationwide last month, the lowest number recorded for this time of year since the daft.ie reports began in 2006, a 17% decrease on a year ago.

The 11.5% rise in rent makes the first three months of the year the eighth quarter in a row that rent inflation has been more than 10% and also that a new all-time high in the price of rent has been set.

The average monthly rent across the Republic during the first three months of this year was €1,261 which is a monthly increase of €232 – or €2,784-a-year – compared to its previous peak in 2008.

But landlords are blaming the high tax rate on rental income for the lack of supply in the market.

Stephen Faughnan of the Irish Property Owners’ Association said: ‘Every euro of rent received by landlords is significantly reduced by a variety of taxes, levies, charges and maintenance costs.

‘With approximately 62% of rental income going back to the State it is not surprising that more private rental investors are leaving the sector than are entering the sector.’

Housing charity Threshold says surging prices show the Rent Pressure Zone restrictions of a 4% rise a year are not working.