Home-renting prices in Ireland have risen by 12.4% this year till June, and they show no signs of slowing down. This will be the ninth quarter to show more than a 10% increase in prices. That means that we’ve entered the third year of a steep incline in rent prices. The cost of renting has actually been increasing for the past six years, though not at this rate. Conversely, the costs of buying a home seem to be lowering, though not many properties are up for sale.
Numbers disclosed by property website Daft show that in the 2nd quarter of 2018, the national average monthly renting cost for a home was €1,304. That average marks an additional €274 per month more than the 2008 Celtic Tiger peak times, and it’s €560 higher than in 2011, the year when the rental market hit an all-time low.
Naturally, the priciest renting properties are located in Dublin. The capital has seen an average increase of 13.4%, which is 34% more than it was during the previous peak. Limerick also saw an increase of 20.7% in comparison to last year. Additionally, Waterford’s renting prices increased by 19.3% and Galway’s by 15.9%. Outside of the big cities, rents rose by 10% on average. That means that, across the rest of the country, the monthly cost of renting is now over €909.
According to the same Daft Report, though, there’s actually an increase in renting properties in comparison to last year. As of August 1, there were over 3 thousand properties available nationwide. The Report even notes the slight improvement in Dublin, where there are 276 more renting units in August compared to last year. However, this is still less than even the lowest recorded nationwide number, back in 2006. Building new homes may have caused the inflation to ease in the sales market. And yet, a similar effect has not been noted in the rental sector.
Brokers Ireland’s director of financial service, Rachel McGovern, has emphasised the importance of property ownership. More specifically, buying at affordable prices and allowing the value of the property to grow. McGovern views this lack of available properties as a travesty. In fact, she even called it a “policy failure” that will have long-term economic effects.
Notably, renting prices are also sure to affect students. They might even be forced to abandon higher education because of the scarcity of affordable housing. Another problem awaits the students who decide to stick with their education. If the expensive rents force them to commute for up to 6 hours daily, they would have travel expenses. Not to mention, a big portion of their day would be wasted, so they wouldn’t be able to perform well.
These circumstances are making people, who are already in dire financial straits, consider buying a home. Even in this difficult economic climate, that would seem to be the frugal choice. Brokers Ireland stated that the difference between rent and mortgage is now basically non-existent. However, a family can’t very well pause their expenses in order to save up for a deposit or mortgage.
And that’s not all. Since properties are few and far between, there is another issue. By the time a family has money for a deposit, the house they chose may be off the market. So, families are finding themselves trapped and having to continue renting instead of buying.