MORE ACCOMMODATION “of all forms” is urgently needed to halt the double-digit rises in rents across Ireland, according to one economist.
The latest Daft.ie rental report, published this morning, showed prices increased an average of 11.8% nationwide in the 12 months to June.
While the rate of inflation slowed slightly compared to that in the previous quarter, a record-low availability of properties is likely to continue to drive rents higher.
There were just 2,930 properties available to rent at the start of August, the first time in the report’s history there have been fewer than 3,000 homes on the rental market.
The availability of properties in Dublin has fallen 20% in the past year to just over 1,100 this month.
The report’s author, Trinity economist Ronan Lyons, said the start of the academic year was traditionally a busy period in the rental market, but there had been “no summer rush” of properties becoming available for the past two years.
“The rental market remains in severe distress due to a lack of supply and thus the appropriate policy response is to boost supply of all forms,” he said.
“This includes purpose-built student accommodation. Based on demographics and other factors, Dublin alone needs a block of 300 student beds approved every month until the late 2020s.”
A number of major developers and investment firms have already been targeting the student accommodation market in Ireland, with US property giant Hines recently launching a 447-bed facility in Dublin.
However prices for the new developments, where rooms can cost more than €1,000 per month, put them out of reach for many students.
The Dublin squeeze
Meanwhile, rents in Dublin increased at the fastest rate of those in any major Irish city, with prices up 12.3% in the past year. The average price in the capital stood at €1,707, 18% above the peak rates of the Celtic Tiger period.
One recruitment firm recently reported that foreign tech workers were turning down job offers in the Irish capital due to “horror stories” about the local rental market.
Lyons previously warned the government’s rent controls, which capped annual rent rises at 4% in Dublin, Cork and Galway city, among other regions, were creating a two-tier market that strongly favoured sitting tenants.
The rate of increase in Dublin rents was followed by that in Limerick, where prices were up 10.8% to an average €919 per month, Galway, up 10% to €1,026, Waterford, up 8.4% to €772, and Cork, up 6.8% to €1,122.
Note: Fora publisher Journal Media Ltd has some shareholders in common with Daft.ie.