Rents reached their highest level on record in the second quarter and are nearly 10 per cent higher than they were a year ago, according to a new study.
The Daft.ie report shows rents rose nationwide by an average of 3.9 per cent in the period April to June to €1,037, the largest three-month increase since the peak of the Celtic Tiger in 2007.
The report's author, TCD economist Ronan Lyons, warned that with the average rent nationwide having risen by over 39 per cent since bottoming out in 2011, most students would find it difficult to find somewhere to live ahead of the new academic year.
“While a large number of purpose-built student apartments are either being built or are planned, these will take time to come on stream and will only cater for those on higher incomes. The majority of students will face tough choices about where to study and where to live,” said Mr Lyons.
In Dublin, rents rose by 11.1 per cent on an annual basis to €1,520 and are now 5.2 per cent higher than their previous peak in early 2008.
Rents rose for the fourth quarter in a row in Cork by 18 per cent to €1,051 and were up 13.9 per cent in Galway to €932. In Limerick, rents have risen 15.5 per cent in the last year to €829 and in Waterford city, they jumped 13.3 per cent to €712.
Outside of major cities, rents increased 9.7 per cent to €736 but are still 5.5 per cent below peak levels.
Shortage of properties
The latest report shows there were just over 3,600 properties to rent across the country on August 1st. This marks a rise of 500 properties versus May, but is the lowest on record for the time of year when listings typically rise ahead of the academic year. It is also 1,000 fewer than on the same date a year previously.
In Dublin the situation is even more critical, with just 1,100 properties to rent in the capital at the start of August.
The average monthly cost of renting a one-bedroom apartment in Dublin 1 is €1,237, up 12.2 per cent on an annual basis. A similarly sized apartment in Dublin 2 is €1,462, a 7.9 per cent rise versus last year. A two-bedroom house in Dublin 1 costs €1,504, up 11 per cent on the second quarter of 2015. In Dublin 2, a two-bed apartment will cost €1,741, a rise of 9.2 per cent.
"This isn't a happy picture for anyone renting in Ireland. But the class of 2016 are really stuck between a rock and a hard place. They're low-income newcomers to the most competitive areas of the housing market because the colleges they're attending are mostly city-based," said Conor Viscardi, UCD student union president and Kieran McNulty, his Trinity College Dublin counterpart.
“The majority can only afford to let for nine months instead of the standard 12 and don’t have the stable earnings or references of a full-time professional. In the private rental sector right now, it’s unlikely they’ll get a viewing, let alone a lease,” they added.
The Union of Students in Ireland (USI) recently warned that rising rents are forcing students out of college. It has called on homeowners to lease out spare rooms for the upcoming academic year to students who might otherwise have to postpone taking up places on courses at college.
