Shortage of homes for rent worst in a decade

The shortage of properties for rent has reached its most critical level in a decade, pushing rents up in every county.

The latest survey by the property website Daft.ie shows the number of properties for rent in Dublin is at its lowest in 10 years.

Availability in Cork, Limerick, Waterford, and Galway is the poorest in nine years, and everywhere else in the country supply is at an eight-year low.

Prospective renters had just 4,300 properties to choose from at the start of this month and only half of those were in the cities where demand is highest. A year ago there were 7,200 properties available.

Trinity College economist Ronan Lyons, author of the report, said the survey showed policymakers were still failing to get to grips with the challenge of matching supply with demand.

“There was, and still remains in some circles, a belief that vacant homes somewhere in the State are a substitute for vacant homes where they are needed,” he said.

“However, the importance of employment means that cities — as natural job creators — are experiencing the bulk of population growth but without any building.”

“Dublin’s population may grow by as many as 100,000 families during the 2010s but, halfway through the decade, fewer than 10,000 new homes have been built.”

Mr Lyons said that while rising rents in some counties, particularly those in the west of the country, were a reflection of the improving economy and less of a cause for concern, increases in other areas were “far from benign”.

Rents increased nationally by an average of 8.2% over the past 12 months with the most dramatic increases in the commuter counties serving Dublin. Topping them all is Kildare where rents shot up 15% to an average of €981 per month.

But even in Monaghan — the county that recorded the lowest increase at 1.2% and where the average rent is now €552 — the rise still outstripped general inflation which was less than 1% over the last year.

Average city rents are now as follows: Dublin: €1,358, up 8.3%; Cork: €911, up 7.5%; Galway: €889, up 7.4%; Limerick: €718, up 6.8% and Waterford: €634, up 5.6%. Rent-a-room prices have also risen in the cities by between 5% and 10%.

The knock-on effect of shortages in Dublin is felt primarily in the city’s commuter counties where average rent inflation rose from 7.6% to 14% in 12 months while in Dublin itself, it eased from 17% to 7%.

At the current average mortgage interest rate of 4.3%, it is now cheaper to buy than rent almost every kind of property in almost every county and it would take a dramatic 2% increase in rates to reverse that trend.

Rent inflation is also preventing people in mortgage arrears from selling up and renting, forcing students to choose colleges in places where they can access and afford accommodation rather than the course they want to pursue and limiting workers’ job options for the same reason.

“In a labour market where mobility matters, we have ended up with a rental market where tenants are afraid to move,” Mr Lyons said.

He said recent talk of a cap on rents was not a solution. “This tackles the symptom, not the cause,” he said.

“Solving the lack of housing will require initiatives to moderate the high cost of building homes in this country and completely reforming the way social housing is funded.”

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