Rents and house costs to keep going up, Chartered Surveyors forecast says

Rents will continue to rise strongly this year by 5% and house prices will rise 2%, the Society of Chartered Surveyors Ireland (SCSI) has forecast, as shortages of affordable housing continues to drive the market.

The projections come as the issues of housing and homelessness continue to be hotly debated topics in the election campaign.

Rents will rise 5%, despite urban rent caps, as the limits do not apply to new units or to major refurbishments by landlords, the society said.

“Nationally, chartered agents consider that there will be a significant lack of rental properties of all sizes in 2020, with 58% of respondents experiencing an increase in rental demand by tenants in the last 12 months,” said SCSI.

The greatest mismatch between supply and demand for housing will be in the private rented sector.

It said 2% house price increases projected for this year compares with a 4% rise in 2019.

It predicts prices will increase at a slightly higher rate of 3% in Munster and the Connacht-Ulster region.

“The double-digit price inflation we saw in recent years was not sustainable and a return to a more stable market with modest price increases will enable buyers and sellers to plan for the future with more certainty,” said SCSI president Johanna Gill.

Ms Gill said that Brexit had weighed heavily on household confidence “from Donegal to Cork and from Dublin to Galway”.

The SCSI reiterated that cuts in capital gains tax and Vat would help boost housing supply. After many years of price increases, rents and house prices rose by annual rates of 4.3% and 1.4% towards the end of 2019, according to CSO figures.