Rents soar by 15% as demand goes through the roof

THE number of houses for rent in Ireland has hit an all-time low, especially outside Dublin, where increased demand has seen rent soar by up to 15% in a year.

A new survey by property website Daft.ie, released today, shows there were just 2,455 homes to rent on August 1 this year.

Of the properties available, 1,666 homes were in the capital, leaving just 789 properties on the rental market across the rest of the country – the lowest on record, an almost 75% drop on the average of 9,300 for the past 15 years.

Renters have been hit by this unprecedented shortage of supply as the impact of Covid starts to recede, with workers beginning to return to offices and third-level students look for accommodation for the September term.

Trinity College Dublin economist Ronan Lyons, the author of the report, said he believed the problem could only be solved by increased housing supply, and not by ‘simplistic rent controls’.

Nationally, rents have increased by 5.6% – the strongest year-on-year increase since mid-2019. Dublin’s rent is now an average of €2,035 per property, while tenants in the rest of the country pay an average of €1,117.

‘While Dublin rents are increasing again, year-on-year, they are just 0.5% higher on average than the second quarter of 2020,’ Dr Lyons said.

‘Elsewhere in the country, rents are increasing and typically at double-digit rates. In Munster, outside the three main cities, rents are 14% higher than a year ago, while in Connacht-Ulster, they are 15% higher.’

He said cities outside Dublin have seen significant price spikes. In Cork, Galway and Limerick cities, rents are 9%10% higher than a year ago, while in Waterford, they are nearly 12% higher. He also noted that Ireland’s population was increasing rapidly, with 800,000 more people living here now than in 2006.

Dr Lyons said: ‘This is a problem that cannot be solved by simplistic rent controls... To solve this, instead of wishing the problem away, new rental homes must be built. For this to happen, costs must be brought down.’

Rory Hearne, assistant professor in social policy at Maynooth University and author of Housing Shock: The Irish Housing Crisis and How to Solve it, said the Government’s forthcoming, but postponed, Housing for All Plan must address renters’ difficulties.

He called for immediate legislation to make rents more affordable and to remove the ability of landlords to evict a tenant on sale of the property.

He said rents for new-build properties and refurbished units should be capped.

Meanwhile, The Davy Research Economic Forecast has said it expects Irish residential property price inflation to equal 8% in 2021 and 3.5% in 2022.

‘Although the housing market has tightened, we still see mortgage lending of €10billion in 2021 and €11.2billion in 2022, up from €8.4billion in 2020,’ it said.

It forecast that there would be 22,000 housing completions in 2021 and 26,000 in 2022.

The Institute of Professional Auctioneers & Valuers said the report highlights yet again that it is only in the two most expensive areas in which to buy property, Dublin 4 and Dublin 6, that repaying a mortgage on a three-bedroom home is more expensive than paying rent, and at that it is only marginally so.

In every other area of the country it is cheaper to service a mortgage than pay rent.

Pat Davitt, IPAV chief executive, said under the current mortgage rules those on average wages cannot secure a mortgage in the most sought after, generally urban, areas.

‘Costs must be brought down’