The Government has said it will be able to turn other parts of the country into rent pressure zones, as will be the case for Dublin and Cork City, within weeks if required.
The new measure, contained in the Government’s new strategy for the rental sector will first apply only to the four Dublin local authority areas and the Cork City Council areas.
The average rent in Dublin, as of the third quarter in 2016, was €1,545, peaking in the south of the county at €1,801, while the same Daft.ie rent report showed the average in Cork City was €1,087, which is up 14.4% in a year.
Some organisations said problem areas such as Galway City and the commuter counties around Dublin need to come under the same rent pressure zone mechanism. That was borne out by the latest data published by the Residential Tenancies Board earlier this month.
The RTB Quarterly Rent Index showed rents outside Dublin were rapidly catching up with those in the capital. “Up to the third quarter last year, the pace of growth in rents outside Dublin was slower than in the capital,” it said.
“However, the speed of growth in annual rents outside Dublin has overtaken Dublin in the past year, and continues to rise at a faster pace. This now means the difference between rents outside Dublin and rents in Dublin has fallen from a gap of 15.5%, at the peak of the difference in the third quarter of 2015, to 7.3% in the third quarter this year.
“The faster growth in rents outside of Dublin reflects similar trends in house prices, where regional prices have exhibited stronger growth than those in the capital since the second quarter last year.”
A Department of Housing spokesman yesterday said any expansion of rent pressure zones could take place “within weeks” if required.
There was also some criticism for the exemptions to the rules, which still have to go through the Oireachtas before they come into force. Rental properties within a rent pressure zone will be exempt if they are new to the rental market or have been substantially refurbished in the last two years.
The Peter McVerry Trust tweeted that the “new rental strategy allows landlords delivering new supply free to charge what they want”.
Property Industry Ireland, the Ibec group that represents businesses in the property and construction sector, said the introduction of further rent regulation was “undermining confidence in the market”.
The report includes measures to boost the powers of the RTB and encourages long-term letting.
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