Average rents across Ireland have reached a record new high in the first three months of 2017, that’s according to the latest Rental Price Report from property website Daft.ie.
For example, over the last year to March, average rents rose nationally by 13.4%. Nationwide the average rent is €1,131. Outside of the metropolitan Dublin area, rents are now 41% higher than at their lowest point, the figure for Dublin in 66%. Overall, the average residential rent across the country has risen by 52% since bottoming out in 2011 and is now 9.9% above the peak prices in 2008.
Regarding availability, the report notes that there were fewer than 3,100 properties available to rent nationwide on May 1st, that’s down from almost 4,000 properties three months previously and in line with May 2016, the lowest on record.
For those looking to rent a home in Clare, the average rent is now €677, an increase of 11.6% from last year and a massive 28.6% higher than at the lowest point of the recession in 2011. Today in Clare the average rent of a 3-bedroom house is €639 per month, that’s an increase of 9.6% from last year.
For those in a position to purchase a home of their own, the report notes that a 30 year mortgage on a 3-bed property at current rates would now cost €431 per month. If you can get a mortgage, it appears that buying is a lot cheaper than renting.
One response by Government to the housing crisis has been to introduce Rent Pressure Zones (RPZ) to cap rents for three years in areas where prices are increasing by at least 7% annually. The aim of the RPZ is to protect sitting tenants from significant rent increases.
However Ronan Lyons commented, “Regulatory measures designed to limit rent increases could only ever have a very limited effectiveness in a market with such a scarcity of supply. Indeed, there is evidence to suggest that rent increases for sitting tenants have been only half the size of increases faced by new tenants. The more appropriate solution remains to increase supply. This includes both making better use of the existing stock of housing and building substantially more, in particular more apartments.”
Commenting on the Daft.ie report, housing charity Threshold has called for RPZ laws to be properly enforced and strengthened to ensure protection for new renters entering the market. Dr Aideen Hayden, chairperson of Threshold, said: “Once again the Daft.ie report highlights the pressures in the private rented sector, reflecting the need to increase the supply of affordable rental homes for low- to middle-income tenants.
“While it is too early to draw conclusions on the effectiveness of the RPZ, it is clear that the legislation introduced in December 2016 is creating a two-tiered system between sitting and existing tenants. The legislation was intended to protect both categories of tenants and contains a provision that a new tenant can be charged only 4% more than a previous tenant in a Rent Pressure Zone. However, we are aware of cases where this is being flouted.”
Dr Hayden added: “We are aware that some prospective tenants are desperate, and those who can afford it are willing to pay above and beyond the caps. This is particularly worrying for those who cannot afford these rents, as they are simply priced out of the market.
“It is our experience that those who secure accommodation outside the RPZ caps are often so relieved to secure a home they are unlikely to challenge a landlord for fear of a breakdown in the relationship. This is compounded by the fact that under the Residential Tenancies Acts, a landlord can terminate a new tenancy within the first six months of its creation without any reason. If a tenant does want to challenge the rent their only recourse is to take a case to the Residential Tribunal.”