The report this week by Daft.ie on rent prices once again highlighted the dysfunctionality of the Irish property market.
Nationally rents rose by 5.6 per cent year-on-year in the second quarter. But substantial double-digit increases were recorded in many parts of the country, including a rise of 16.5 per cent in Kerry, 16 per cent in Leitrim and 15.8 per cent in Sligo. The rise in Dublin was just 0.5 per cent.
Speaking on this week's episode of Inside Business, a podcast from The Irish Times, Marian Finnegan, the managing director of residential and advisory at Sherry FitzGerald, the country's biggest estate agent, cited an exodus of private landlords from the sector.
“In the past 10 years we’ve been seeing an exodus of private investors out of the marketplace. For every one investor who is coming in we’re losing two, and that exodus of stock is particularly evident outside of Dublin,” she said, arguing that big institutional investors will focus on big cities rather than rural areas of the country.
Finnegan cited the many regulations now in place and an onerous taxation burden as the reasons why so many landlords are exiting the rental sector.
On a broader level, Finnegan expects about 21,000 houses to be completed this year “hopefully”, versus “latent demand” for 35,000 to 40,000 units.
She expects house prices to rise by about 5 per cent, driven by inflation in rural areas rather than Dublin (3 per cent-plus).
The Sherry Fitz executive called for the Government to adopt a long-term (she’s talking about 30 years) plan to tackle the housing crisis in a specific and refined approach, such as targeting new stock to the areas of the country where it is most needed and where employment opportunities are located. “We need to say ‘this is what Ireland should look like in 25-30 years time and this is how we get there’.”
It would make more sense than the reactive policy-making of recent decades, and it will be interesting to see if it makes the Government’s delayed Housing for All strategy document. Don’t put your house on it.
