The cost of renting is approaching record levels even as the cost of paying down a mortgage tumbles, official figures published yesterday show.
The chronic shortage of homes has again sent rents soaring to stand only a whisker short of matching their boom-time levels in early 2008, CSO figures showed, even though household incomes are a fraction of their pre-crash levels.
Private landlord rents climbed 1% in July in a single month and were 10.4% more expensive than a year earlier. Rents are among the few goods and services on the Consumer Price Index that are rising at break neck speed, reflecting the shortage of housing as the economy recovers, said Philip O’Sullivan, chief economist at Investec Ireland. “The reality is that in most parts of the country it is too expensive to build,” he said.
Only car insurance on the CSO’s monthly shopping basket is rising faster. Car insurance rose 0.4% in July and is now 16.3% more expensive than a year earlier. Insuring a car has now climbed by over 42% since the eve of the crash, in early 2008.
Elsewhere, the CPI index suggests that prices of goods and services fell by an overall 0.3% from June and were 0.2% lower from a year earlier. Amid weaker-than-expected world economic growth, a sharp drop in oil and, more recently, in world dairy prices is helping push the prices of many goods sharply lower. The CSO said transport, clothing and footwear, food and non-alcoholic beverages, and furnishings and household equipment and household maintenance all fell in the past year.
Mortgage interest payments recorded some of the largest falls — dropping 9.2% in the year — after banks trimmed mortgage rates.
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