Warning rental market 'out of control' as figures show rents up 11.3%

Warning rental market 'out of control' as figures show rents up 11.3%

Housing groups have said the current rental situation is "unsustainable" after the latest report showed rents rose nationwide by an average of 11.3% in the year to last September.

The Daft.ie quarterly report showed yet another all-time high for rents, representing the 10th quarter in a row in which average rents increased.

Rents in Dublin are now 36% higher than during the boom a decade ago and South Co Dublin is the area with the highest average rent anywhere in the country, at €2,156.

The average rent nationwide is €1,334 and increases are most acute in urban areas. Rents are 20% higher in Limerick and Waterford than a year ago while, in the same period, rents in Galway were up 16% and rents in Cork up by 13.7%.

The chair of Threshold, Aideen Hayden said the report represented "a bleak Christmas for renters and an uncertain future for 2019".

"These type of rent increases are unsustainable and out of control – it’s telling that the cost of renting now exceeds the cost of a mortgage," she noted.

"It is also worrying rent increases outside of Dublin are rising faster – attributable to displacement from Dublin where rents have risen by more than 100% since 2012 in nine Dublin postal districts.

“For some, the increase in rent is greater than the cost of a Christmas dinner for a family and exceeds the cost of a weekly shop – therefore what are the sacrifices that so many are making just to keep a roof over their heads?

"Many of us are not feeling any real impact from a sustained economic recovery. The tax benefits from last month’s budget are effectively wiped out, with rising household costs from home heating to electricity costs also a problem.”

The report's author Prof Ronan Lyons told RTE there was a "mismatch" between housing supply and demand. Ms Hayden said: “The issue here is lack of availability, leading to lack of affordability, compounded by a lack of enforcement of rent pressure zone legislation which caps rent increases at 4% per year.

Lack of availability of social housing is pushing up rent in the private rented sector as those who would traditionally have been accommodated in social housing are vying for the same limited stock as those who would traditionally have rented in the private sector. Lack of enforcement of the RPZ legislation is seeing those increases go beyond the legal limit."

The Simon Communities also raised concerns regarding the report's findings, tweeting: "RPZ’s are not having the desired effect as people continue to be priced out of the market."

The Department of Housing said the Government had approved the priority drafting of the Residential Tenancies (Amendment) Bill earlier this year which would give the Residential Tenancies Board (RTB) more powers, including in relation to RPZs.

The Bill is currently being drafted by the Office of the Parliamentary Counsel and according to a recent response to a parliamentary question, will permit the RTB to "investigate any contravention of the law regarding the 4% rent increase limits in Rent Pressure Zones (RPZs) and to take enforcement action, if necessary, including the imposition of sanctions on landlords in breach; and - initiate an investigation without the need for a complaint to be made".

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