Rents keep rising as scarcity of properties to let persists

A massive surge in home-building is needed to stem the relentless rise in rents, latest rental market analysis shows.

The report says 500 new rental properties need to be built every single week for the next three years in Dublin alone — a total of 80,000 over the period.

Report author Ronan Lyons says the solution is to encourage private developers to build and institutional investors to become landlords.

That conflicts with the view of many housing rights advocates that the bulk of new homes should be provided by the State through social housing programmes and by non-profit bodies.

Whatever the solution, the problem is clear — there are too few rental properties available to meet the demand and rents are rising far in excess of general inflation, further limiting the choices of hard-pressed renters.

According to the report, from property website Daft.ie, the average monthly rent being paid nationally is now €1,366 but there is huge variation within that figure as it covers both rural and urban addressess and properties of all sizes.

A family needing to rent a three-bedroom house faces an array of different rents depending on where they need to live.

Dublin will present them with the greatest challenge as homes in that category range in cost from €1,671-€2,210 per month in the county areas and €1,780-€2,623 within the city boundary.

City-county divides are also evident in Cork where rent on a three-bedroom home is now €1,335 in the city and €929 in the county. The same property in Galway city will cost €1,235 and in the county, €846.

The same family looking in Limerick could find a house for €1,167 in the city area and €778 in the county. The difference in Waterford is €972 in the city and €847 in the county.

By contrast, locating in Leitrim would mean getting the same property for €581 per month — just over a third of the cheapest available anywhere in Dublin.

There are no bargains for anyone who can get by with renting a one-bedroom property either. Rents everywhere in Dublin city and county are above €1,200 per month and in Cork City and Wicklow they have exceeded the €1000 mark.

Hefty increases are also evident in the rent-a-room market. A single bedroom in a shared property now costs €700 a month in Dublin city centre, and city centre prices are also high in Cork at €491; Galway, €419; Limerick, €371 and Waterford, €364.

In many cases, the report shows, it remains cheaper to pay a monthly mortgage on a property than to rent the same property, based on a 3.5% variable mortgage for a term of 30 years.

Records are being set in all regions. In Munster, outside of the cities, property price inflation is running at 12%, the highest on record, while it is at 10% in Cork City and 14% in Limerick and Waterford. At the same time, there are just 570 homes to rent — the lowest on record.

In Galway city, rents have almost doubled since they bottomed out in 2012, rising by 91%, and there are just 420 homes to let across all of Connaught and Ulster.

In all of Leinster, only 499 homes are available to rent. Rents have risen at varying rates across the province, doubling in Meath since the end of the recession but increasing at just over half that rate in Carlow and Wexford.