What’s be­hind our rental cri­sis?

The Kerryman (Tralee Edition) - - NEWS -

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

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