Rents on the rise but still 23% below boom rate

The cost of renting across the country rose by 3.5% over the past year, but tenants are still paying 23% less than they were at the height of the boom in 2007.

The latest quarterly rent index from the Private Residential Tenancies Board breaks the rental market down to Dublin and outside Dublin .

It shows that between the first quarter of 2013 and the same period in 2014, private sector rents in the capital went up by 8.4%. House rents rose by an average of 6.7% and apartments went up by 10.3%.

However, outside Dublin the market was more “subdued”, the PRTB said. It found that overall rents grew by 0.8% over the year — houses rose by 0.1%, and apartments by 2.1%.

The average price across the country, including Dublin, for renting a house in the first quarter of this year was €775, while the average for an apartment was €830. In Dublin, the average house rent was €1,227, while those renting an apartment in the capital were paying an average of €1,148. Outside the capital, house rents averaged €637 and apartments at €594.

“In the first quarter of 2014, monthly rents for the country as a whole were close to 23% lower than their peak in late 2007, with Dublin rents down 16.4% from peak,” the PRTB said. It said rents for houses were 24% lower than the peak and rents for apartments were nearly 21% lower.

Commenting on the Rent Index findings, Anne Marie Caulfield, director of the PRTB, said: “The private rented sector in this country continues to reflect a story of two very different markets. Dublin continues to show a strong year-on-year growth in rent levels, while in the rest of the country shows only a marginal increase over the year to the end of March this year.”

Meanwhile, the National Economic and Social Council has warned that social housing is “at a crossroads”, with many people on low incomes struggling with their housing situation.

“This is evident in several ways: the number of mortgages in distress; long waiting lists for housing; rising homelessness; and rapidly rising rents, particularly in Dublin,” NESC said.

In a report which has been forwarded to Government and which will be made public today, it:

* Considers how low cost competitive finance could be provided to fund the quantity and quality of housing required in a way which does not add to government debt;

* Examines how renting could be made more affordable and attractive and, by extension, how this could stabilise Ireland’s wider housing sector;

* Argues there needs to be more direct public policy influence on housing supply and urban development.

“The central challenge is to create an effective and interconnected combination of finance, supply and cost rental,” said NESC director Rory O’Donnell.

“Experience strongly suggests that these connections will not be established automatically or by providing incentives to uncoordinated private or public actors.

“Instead, NESC believes new institutional arrangements are necessary to move policy in this direction.”