The market heats up

THE mercury in the thermometer that is the Irish housing market rose another degree or two this week as two different sets of figures were released in relation to planning permissions granted nationally in Q2 and average rents to the end of June 2016.

In Q2, according to the CSO, planning permission was granted for just 3,141 homes which is up on last year’s figure, however, it’s still not within an ass’s roar of what is required. The annual requirement of new homes nationally, including one-off houses, is estimated to be 25,000 units per year. If you take into account the pent-up demand that comes from a lack of construction in recent years, then the actual figure required is closer to 35,000.

As Minister Simon Coveney outlined this week, it’ll be next year before we start to see positive numbers coming through in relation to the delivery of new social and private housing. As the ‘Rebuilding Ireland’ project was initiated only in July, many of the proposed units are still at design and pre-planning stage.

The second set of figures, the RTB Quarterly Index, which was compiled by the ESRI, confirmed that 22,103 tenancies commenced nationally in Q2 of 2016. These figures are accurate as they reflect actual rents that tenants paid. Of most concern is the stat that shows average rental prices for Dublin are now 3.9pc higher than they were in 2007. In the first quarter of 2016, average rents were flat but in Q2 they increased by a head-turning 4.5pc which is a very substantial figure for one quarter.

With statistics showing that the numbers of rental properties coming to market is reducing every month, rents will only continue to rise. Census 2016 also highlighted the fact that our population is growing at a faster rate than the total national housing stock. Figures for rent outside Dublin are still 11.2pc behind the 2007 peak. The gap between Dublin and the rest of the country continues to grow.