The cost of renting a home in the Republic has climbed by more than 11 per cent over the last 12 months with the increases recorded in Dublin even higher, new data from daft.ie states.
While the annual rate of inflation in rents nationally has eased from 13.4 per cent at the start of the year to 11.2 per cent, it is in double figures for the sixth quarter in a row. The rate of increase in Dublin was put at 12.3 per cent over the last 12 months.
The quarterly increase in rents between June and September was 3.4 per cent, the fourth largest ever recorded and it means that four of the five largest recorded quarterly increases in rents have happened since the start of last year.
The average rent nationwide has risen by 61 per cent since bottoming out in late 2011 and, having exceeded its 2008 peak last year, is now 16.4 per cent above the previous high.
In Dublin, rents are now an average of 22.8 per cent above their previous peak, while in Cork and Galway cities, rents are 13 per cent and 25 per cent above levels recorded a decade ago. Outside the major cities, the average rent is 8.7 per cent above the last peak.
Having fallen for almost three years between 2008 and 2011, and then stayed stable until late 2012, rents have now risen for 21 consecutive quarters.
The upswing is now not only significantly longer than the preceding downturn but also longer than the upswing before that downturn, which lasted from mid-2004 until early 2008.
Available to rent
The index is based on asking rents for properties advertised to let on Daft.ie where there were fewer than 3,400 properties available to rent on November 1st, down over 16 per cent on the same date a year ago, but up slightly from the 2,900 available on August 1st.
"It is tempting to read these figures and demand the Government do something," said Ronan Lyons, the author of the report.
The economist and assistant professor at Trinity College said the response to rising rents "needs to be far more surgical than that.
“Otherwise, we run the risk of falling into the classic politician’s trap: ’Something needs to be done. This is something. Therefore, I’ll do this.’ I would rather those who read these figures demand that the Government do the right thing.”
Capping increases
He said capping rental increases – as the Government has done in recent years – “tackles the symptoms, not the underlying causes” and he warned that such caps “run the risk of ossifying the rental market by discouraging churn”.
He said it would be far easier to keep a landlord to 4 per cent increases as a sitting tenant than as a new one. “This locks out new arrivers to Irish towns and cities or those trying to start a household.”
Prof Lyons said those who campaign for improved housing outcomes – from fewer people homeless to better standards in rental accommodation – “need to realise that the solution to all these is more supply.
“More supply improves availability, lowers rents and shifts bargaining power towards the renter. To build more supply, both profit and non-profit housing organisations need to be able to cover costs. That is where policymakers need to focus.”
