Rents are rising in double digits and are now higher than at the height of the Celtic Tiger, with “disastrous” consequences for renters, communities, and the country’s competitiveness.
The average rent across the country increased by 11.7% in the 12 months between September 2015 and the same month in 2016.
This is the highest yearly increase since Daft began its quarterly rent reports 14 years ago.
Rent is now at all-time high, with the average renter forking out €1,077 per month in July, August and September.
In Dublin, the average rent for a three-bed semi is €1,800 a month, nearly 10% higher than the previous Celtic Tiger peak.
Nationally, rents are 5% higher than they were in 2008. In Cork City, they have risen 8%, while in Limerick, they are 2% higher. In Waterford, they remain 6% lower.
In Dublin, they are 9.3% higher than in the 2008 peak.
Ronan Lyons, the report’s author and economist at Trinity College Dublin, said: “This is having a disastrous effect on social cohesion as well as on Irish competitiveness.”
He said the Government needs to look at why it costs so much more to build a house in this country than elsewhere.
“The figures from the third quarter of 2016 are worrying,” said Mr Lyons. “They include a new all-time high for the average monthly rent nationwide, the highest rate of annual inflation on record, as well as the joint highest quarterly increase in rents.
“The increases stem from strong demand and very weak supply. To bring about more rental supply, policymakers urgently need to audit the cost of building homes in Ireland compared to other high-income countries.”
Mr Lyons said the Government has to get builders to work, as little or no construction has taken place in the past five years, an absence he described as “a systemic failure in desperate need of policy solutions”.
“There is no more urgent task facing the minister for housing, his department and advisers, the Housing Agency and others involved in ‘Rebuilding Ireland’ than understanding why the costs of building, and building apartments in particular, is so dramatically out of line with our own incomes and indeed with the cost in other countries,” he said.
In Dublin rents rose by 12.1% between September 2015 and 2016. Outside of Dublin, the average rate of rent inflation was 10.9%.
In the past year, rents rose by 14.4% in Cork City, with a three-bed semi in Cork City now costing €1,135 per month to rent. A one-bed apartment costs €819 per month in Cork City.
Rents in Galway are 10.9% higher than a year previously, while rents in Limerick have risen by 13.2% in the last year. In Waterford City, rents have risen by 11.2% in twelve months.
Mr Lyons said that local authorities, particularly in Dublin, should be setting targets for apartment and purpose-built student housing construction, as we have sufficient family homes.
He also warned that Ireland has to stop its obsession with building on greenfield sites but instead should should make its suburbs and towns denser rather than allowing sprawl into the countryside.
“Mindset is a challenge, particularly on the part of local authorities,” said Mr Lyons. “Ireland is not at all immune to Nimbyism and its excuses for pushing development onto greenfield sites, rather than in already built-up areas such as suburbs and market towns. However, it is precisely the densification of our suburbs and towns Ireland needs.
“While there are perhaps political victories in measures to help families buying newly built three and four-bedroom houses, Ireland does not lack this particular kind of property.”
There were just over 3,600 properties available to rent nationwide on October 1
Year-on year increase in rents:
¦ Dublin: €1,580, up 12.1%
¦ Cork: €1,087, up 14.4%
¦ Galway: €962, up 10.9%
¦ Limerick: €862, up 13.2%
¦ Waterford: €735, up 11.2%
¦ Rest of the country: €764, up 10.9%
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