Dublin in the grip of property bubble

Ireland’s capital is in the grip of a fresh property market bubble, with the cost of renting in Dublin now almost twice as high as anywhere else in the country.

New figures revealed in a major survey of 302,000 homes nationwide show the rental gap becoming increasingly apparent.

According to the latest Private Residential Tenancies Board rent index, drawn up on behalf of the Economic and Social Research Institute, the average cost of renting in Dublin now stands at €1,070 for an apartment and €1,168 for a house.

The rates, taken at the end of 2013, are almost double those for outside the capital, which average out at €630 for an apartment and €608 for a house.

The levels mean that during 2013 the cost of renting an apartment or house in Dublin rose by 10.5% or 6.6% respectively.

However, in other parts of the country rates stayed relatively stagnant, with just an overall 1.1% climb.

Rental costs in Dublin have consistently risen since the start of 2011 and are now just 15.5% behind their peak period of 2007.

Detailing the findings, PRTB director Anne Marie Caulfield, said the trend reflects a growing supply and demand problem in the capital.

She said since the Celtic Tiger crash there have been few, if any, new builds. Coupled with the fact many people who chose not to buy during the boom or bust now have young families but cannot afford rising house price costs, she said renters are effectively having to compete with each other over a dwindling number of decent homes.

The findings, which can be read at www.irishexaminer.com, are supported by recent reports by the CSO, Davy’s and other property specialists.

In January, housing charity Threshold warned that the number of people being referred to its homeless support service has almost doubled in just 12 months.

The group suggested a shortage of rental accommodation, an increase in rents and cuts to welfare payments such as rent supplements are putting families in an untenable situation.

The Department of Finance’s secretary general, John Moran, said: “There may be a need to address fully the idea of everyone needing a three-bedroom house in Dublin and if that is the right way to go about planning long term.

“That could raise a scenario, which I wouldn’t like to get into, of a Los Angeles-type sprawl of Dublin with three-bedroom houses all the way out to Kildare and surrounding counties while the city centre gets hollowed out again, even as the overall population grows.”