What’s behind our rental crisis?
In a bid to tackle the ongoing housing crisis the Government is set to place strict curbs on the short-term letting market, which is seen as a major contributing factor in Ireland’s chronic housing shortage. Websites like AirBnB have had a huge impact on the market but they are only part of the problem. Here Sinead Kelleher looks at the many issues affecting the rental sector in Kerry.
ONLINE holiday rental website AirBnB is a major factor in the current Kerry rental crisis as it had led to a shortage of properties available for medium and long term rental, according to local auctioneers.
And the effects of the increasingly popular short-term rental site are of particular concern in Killarney town, where there is a severe shortage of properties and where prices have risen to match those in Cork city which are significantly higher than rents elsewhere in Kerry.
The issue has already had an adverse effect on seasonal employees in the tourism sector who are finding it increasingly difficult to find accommodation which is believed to be driving up rents – an issue also reported in The Kerryman earlier this year when Killarney Chamber President Paul O’Neill said: “Getting seasonal staff is difficult but if they get staff the lack of accommodation for staff is an issue”.
The crisis, which has been a major concern in Dingle and Killarney, in recent years also spread to Waterville, Caher- siveen and Kenmare during the summer season just ending.
The most recent Daft report into rents across the county, puts the average rent in Kerry at €768 per calendar month – a year-on-year increase of 8.9 per cent – but in Killarney rent is substantially higher and closer to Cork city where the average rent is €1,266.
This week there were 19 properties to rent on Daft. ie in Killarney, the largest database of rental properties in Kerry. However, many of these properties were in areas such as Firies, Milltown and Kilcummin and not in the Killarney urban area.
Of the properties available in Killarney town, a three bed house in Loreto Road was advertised at €1,100 and a twobed apartment in High Street was advertised for €950.
Meanwhile, a search of AirBnB on a single night this week in Killarney revealed 87 properties listed for rental. While some were owner-occupied, entire properties were also available and prices varied with rooms being offered for €65 a night and a whole house for one night for €140
Killarney auctioneer, Billy Hennigan, says that the shortage of rental properties in Killarney is at “crisis” level.
“AirBnB is an issue. There was 640,000 bed nights nationally from AirBnB and a lot of stock across the country that would be long-term rentals are now used for AirBnB which means that there is less rental stock available. It is at crisis point. There is a complete lack of stock,” he said.
Other factors to blame include the sale of bad loans by banks to vulture funds. This leads to tenants being forced out of their homes to allow the vulture funds to sell the property.
Though a national issue, Mr Hennigan believes it is a determining factor in the rental crisis in Kerry.
The cost of construction of new homes and the huge tax bill faced by property renters are also a factor, he says.
“Vulture funds are buying out bad loans and are turfing out vulnerable tenants. The Government really have to look at this issue. Vulture funds only want to make a profit.”
He says that the rental crisis is wide-spread as many renters are forced to move to satellite towns and villages which is putting further pressure on the houses in the town.
The most recent Daft.ie report showed that average Kerry rents have increased again, with prices now for a one-bed apartment averaging at €523, an increase of 10 per cent and a three-bed house at €719, a 7.5 per cent rise. The daft report for Q2 of 2018 also shows that it is cheaper to buy a house than to rent in Kerry with a mortgage for a three-bed house at 4.3 per cent interest rate standing at €478. Even given a two per cent increase in mortgage rates, this would be €603, over €100 cheaper than renting the same house.
Meanwhile, in Tralee, AirBnB is not a significant factor in the local rental crisis but it does still play a part.
A search of AirBnB in Tralee shows that this week that there are 50 homes to rent in the area. Most of these are private rooms in a house rather than an entire house and also include rural areas outside of the town. The cost is €50 a night on average.
Local auctioneer Daniel Giles said a simple lack of stock is the main issue in Tralee urban area.
“I would say there is a severe lack of property and for each property there is fierce competition,” he said.
He says the cost of building houses does not correlate with the prices they are being sold at currently.
“It doesn’t make financial sense to build but houses do need to be built and, until they are, things are going to get worse,” he said.
He added that prices in Tralee are affordable but are “definitely going upwards”.
Mr Giles believes that jobs are also the solution to the property crisis in Tralee – more jobs means more income, thus people can afford houses, easing the rental crisis and opening up the market.
In terms of rental on Daft. ie, this week in Tralee there are 18 properties, most of which are advertised with students in mind. However, this is no where near enough to cater for students according to IT Tralee and renting to students forces more stock out of the rental market for individual renters.
“Family houses to rent or buy are the issue,” Mr Giles continued, adding that many houses purchased are also “owner occupied”, further depleting the property stock.
In locations like Kenmare, rental properties are also hard to find. According to Daft.ie, there are four properties to rent in Kenmare – three of which are houses and all over €900, higher than the Kerry rent of €768.
Local auctioneer John Daly, warned that there is a rental crisis in the town, which is compounded by the lack of landlords.
“Owners are getting out of renting because it is a royal pain. Landlords have had bad experiences,” he said.
This, combined with the tax and the regulations that landlords must adhere to, means that for many it is not worth the hassle of renting, he explained.
And he said there is a “little turn-around” in the rental market nowadays.
“People are holding tough. There is little change-over and those who are renting are doing so below the market value so they are slow to move. There are no great deals to be made moving.”
Meanwhile, last Friday evening, 18 AirBnB locations were available, though some of these were also located in nearby Glengariff.
Mr Daly says that AirBnB is a factor in Kenmare but not as much as other towns.
“There is an element of AirBnB but it is not such a big problem. Kenmare, unlike other places, has a lot of holiday homes for rent.”
Killorglin has a number of properties to rent with 21 listed on www.daft.ie this week, more than most other towns. There was 34 options for AirBnB.
VULTURE FUNDS ARE TURFING OUT TENANTS, THEY ONLY WANT PROFIT