National average rent hits almost €1,000 per month

Rents have risen in every county in the past year, bringing the national average to almost €1,000 a month and making renting almost twice as expensive as buying in some areas.

Mon, 17 Nov, 2014 - 00:00

Caroline O’Doherty

Nationally, rents have risen by more than 11% in the space of a year, meaning renters are forking out an average of €933 per month, compared to €842 this time last year.

Increases over the year ranged from a low of 0.3% in Co Donegal to a high of 14.3% in Dublin city and county, with the city centre recording the biggest leap of 16.6%.

The main cities also recorded high increases with average rent in Cork now €897, up 7.9%; Galway €875, up 7.2%; Limerick €704, up 6.4% and Waterford: €628, up 4.5%. A house-buyer would now pay considerably less per month if they were paying a mortgage rather than renting.

In Limerick City, it costs 87% more to rent a one-bed dwelling than to buy one, presuming a mortgage interest rate of 4.3%, while in Cork City it costs 36% more to rent a one-bed than to buy it and 23.5% more to rent rather than buy a three-bed house.

The rate of rent increases in Dublin actually slowed slightly in the past year, from 15.6% in the previous year, according to the report by property website Daft.ie.

However, report author Ronan Lyons, professor of economics at Trinity College Dublin, said: “In many ways the lack of choice is more concerning than the high rental rates.”

He said the number of properties listed for rent in Dublin had fallen 43% since 2011.

“This is particularly worrying given Dublin’s population is growing by roughly 10,000 households a year,” he said. “This is very damaging for Dublin’s competitiveness as a location for foreign direct investment.

“The goal of housing policy should be to ensure that, regardless of whether it’s to rent or to buy, rural or urban, housing is abundant and affordable.”

Outside Dublin and the other main cities, the annual rate of rent increases rise from 5.7% to 6.6%, which Prof Lyons said was “above what might be considered a healthy rate” given that inflation in the economy as a whole varied little from 0%.

However, rents still have some way to go to return to the peak in 2007, with monthly letting prices around 20% below peak for the country excluding Dublin, and just under 10% below in Dublin.

Shortages of rental properties are a feature nationally with availability now at its lowest level since mid-2007.

On November 1, there were fewer than 5,400 properties to rent and numbers in Cork, Galway, Limerick, and Waterford cities are down 25% since 2011.

Rent changes

Year-on-year rent change, major cities:

Dublin: €1,372, up 16.6%

Cork: €897, up 7.9%

Galway: €875, up 7.2%

Limerick: €704, up 6.4%

Waterford: €628, up 4.5%

Year-on-year rent change, regions (excluding cities):

Munster: €610, up 4.2%

Connaught: €561, up 3.4%