RENTS UP BY 10.5%

Dublin Rents Up By 10.5%

By Ruth Baily

Figures published by the Private Residential Tenancies Board (PRTB) show that rents in Dublin have increased by 10.5% in the 12 months to June.  Rents throughout the rest of the country have risen too, by 2.6%.  While the totals are still some way off the 2007 boom time peak, the Dublin figure is worrying. 

The recent quarterly rental report from Daft.ie suggested that fewer properties are available for rent in Dublin.  Therefore the cost of those properties that are available is becoming more expensive.

Affordability is now an increasing concern.  Those renting and on the average industrial salary of €36,000 are now spending 41% of their net income on housing.  In a normal functioning market it should be no more than 30%.  One of the effects of the rising cost of rent is to push families in the private rented sector into homelessness.

This is all a downstream effect of the housing shortage and is being negatively felt through out all sectors of the housing market.  In a properly functioning property market, we would have the appropriate supply of housing in the right places to meet demand.  We would have private rented accommodation available at the correct market value to allow tenants to both pay their rent and have a good standard of living.  Finally, a properly functioning property market would also have a supply of social housing available for those not in a position to provide their own homes.

At the moment, it increasingly appears that we have none of the above.  We have a shortage of housing in our key urban areas, particularly the greater Dublin region.  Rental costs are going up annually and there are 90,000 families on waiting lists for social housing throughout the country.

We are not building enough homes to keep pace with demand.  We know from figures produced by the ESRI that we will need at least 90,000 new homes between now and 2021 with 86% of these in Dublin and its commuter counties.

This year 2,000 new homes will be completed in the Dublin region. 

Builders want to build and while the economy is recovering, the barriers to build are many.  Until they are tackled the housing market as a whole will continue to be problematic with rising rents, house prices and increasing homelessness as people are pushed out of homes they can no longer afford to rent.