The Government is under mounting pressure to tackle the housing crisis as a report shows average rents have soared to an unsustainable €1,000 per month.
According to the Daft.ie rental report for the first three months of 2016, the national monthly rent nationwide now stands at €1,006 — the first time since May 2008 that average rents have topped €1,000.
In Dublin, rents have increased by 8.8% in the year to March 2016, and are now 1.3% higher than their previous peak in early 2008. The highest spike in rents anywhere in the country was in Cork City, where rents rose by 16% in 12 months.
However, other cities are also showing strong rent increases in the past year.
Rents in Galway have jumped by 12.7%, in Limerick they have risen by 12.4%, and in Waterford City rents have risen by 11.1%. Other significant year-on-year increases include 14.2% in Louth, and 12.2% in Longford.
Year-on-year change in rents, Q1 2016:
The hikes come at a time when the number of available properties to rent is the lowest on record. At the beginning of the month, there were fewer than 3,100 properties available to rent nationwide.
Last year, that figure stood at 4,300, while in 2009, there were 23,000 homes ready to rent across the country. Availability in Dublin remains extremely low, with just 1,100 homes on the market at the start of May, compared to an average of 3,800 for the decade between 2006 and 2015.
Economist Ronan Lyons, author of the report, said: “There is the danger that this very high rate of inflation becomes something of a new normal. There is nothing normal — or indeed sustainable — about inflation in rents of 10%.
“This is particularly the case, given that the rate of inflation in the wider economy is close to 0%. In other words, if this situation persisted into the future, the average household would have to devote an ever greater share of its income just to pay its rent.”
daft.ie Rental Report: Q1 2015 - An infographic by the team at daft.ie
Mr Lyons pointed out that parts of Dublin were becoming unaffordable for people on above-average incomes.
National spokeswoman for the Simon Communities, Niamh Randall, said the rent increases were “worrying”and they, along with reduced housing supply, are the main reasons people and families on low incomes and those in receipt of rent supplement are being pushed into homelessness.
“Keeping people in their homes is critical to prevent the stress and trauma of homelessness for more people and families,” she said.
“In the absence of social housing supply, the private rented sector is the only hope for people in emergency accommodation to leave homelessness behind them but they are currently locked out due to rising rents.”
Ms Randall called on the new Government to make addressing housing and homelessness their number one priority and “make good on pre and post-election promises”.
The figures come just days after Simon Coveney was announced as Minster for Housing — seen by many to be something of a poisoned chalice. He said that health and housing were the two main priorities for the new government.
Peter McVerry Trust, the homeless and housing charity, called for new measures to be introduced to tackle rapidly rising rents.
The charity’s CEO, Pat Doyle, said: “Rapidly rising rents are very worrying because more people are left at risk of becoming homeless.
“A single person in Dublin is entitled to €520 per month on rent supplement yet the average cost of a one bedroom apartment is €1,065 per month.”
Meanwhile, AIB has announced a cut of 0.25% to its standard variable rate (SVR) and loan-to-value (LTV) mortgage rates for owner occupier and buy-to-let customers. This is the fourth rate reduction in 18 months, lowering the SVR to 3.4%.
The latest rates apply to new and existing customers with effect from July 1.
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