A record 895,600 people are renting in Ireland, it has been revealed.
A report out today shows 18.9% of the country's population are now living in the private rented sector - the highest proportion since records began. In Dublin, the figure stands at 24.3%.
Despite rents being at record highs, Ireland’s private rented sector (PRS) continues to expand, with 895,600 people living in rented accommodation – an increase of 39,500, or 4.6%, in the last 12 months.
The latest report from Savills Ireland shows that 18.9% of Ireland’s population is housed within PRS – the highest proportion of private renters since quarterly records began.
Dr John McCartney, Director of Research at Savills Ireland and author of the report comments:
“The continued expansion of Ireland’s private rented sector should not come as a surprise.
“Property prices continue to advance faster than average earnings, creating an affordability challenge to home-ownership which is driving people into the rented sector.”
Elsewhere in the report, Savills noted an increase in the size of rental households, which is also now at its largest since quarterly records began.
The average household size has been on a markedly upward trend since the start of 2016, with the four-quarter moving average increasing steadily from 2.7 to 2.8 persons.
Dr. McCartney said: “A reasonable interpretation is that renters have begun to form larger households because of the absolute scarcity of available properties.”
The vacancy rate in the private rented sector remains ", according to the report's authors, with the estimated vacancy rate now standing at just 1.31% across Ireland.
Savills analysis suggests that rents will keep rising until the vacancy rate reaches its ‘equilibrium’ level of 5.6%.
In Dublin, where rental growth is contained by legislation, Savills is forecasting 5-6% rent inflation per annum out to end-2019, whereas outside Dublin an average increase of 7.2% is forecast.
Commenting on investor profile in the PRS, Savills report that cash investors are now crowding out mortgage financed buy-to-let landlords.
An estimated 199,466 PRS units are currently owned outright by investors – 61.1% of Ireland’s estimated PRS stock.
The remainder – approximately 126,995 PRS properties – are held by debt financed investors. This number has declined by 23,192 since Q2 2012 and 34% of the decline occurred in the last year.
Dr McCartney said: “As we predicted last year, there has been an influx of cash investors who are attracted by capital appreciation, low void risk, strong rents and the spread between residential yields and the returns that are available on bonds and deposits.”