Rent went up by how much last year? It depends where you live and whether you want to hear the scary or the not-so-scary numbers.
What are you talking about? If you live in Dublin and are renting, the news is a whole lot worse than if you want to rent in, say, Co Leitrim. Rents across Dublin went up last year by just under 10 per cent, according to the Private Residential Tenancies Board. The rise for homes outside the capital was just 3.9 per cent.
Ten per cent? Four per cent? Those numbers aren't so bad, are they? This is where the scarier numbers come in. In percentage terms, such increases might not seem horrendous, but it is much worse when you realise that someone looking to rent a fairly modest home in Dublin will need an additional €104 each month this year compared with a year ago. That is €1,248 a year – after tax. Just to keep pace with such increases, a renter needs to earn an additional €2,500 gross. And how many people do you know who have seen their salaries jump in the past 12 months? When Dublin is excluded the increases are €24 a month – or nearly €300 a year. Not so bad but still more than four times the rate of general inflation.
What is behind the increases? One word: supply. A dwindling number of apartments and houses are available to rent across the country – most notably in Dublin – and when something is in short supply, prices rise. The Central Bank of Ireland's recent overhaul of mortgage-lending rules is making it harder for people to buy homes, meaning people who would otherwise buy will have to rent for longer, so the problem is unlikely to get better any time soon.
So how much does it cost to rent? The average cost of renting a house in Dublin is €1,301 a month; an average apartment will set you back €1,166. The average you can expect to pay for a house outside the capital is €667 a month; an apartment will cost you €612. The most expensive place to rent is Dublin 2, thanks to those Silicon Docks giants that have set up shop. If you want to join them and live in an apartment you will need to be able to afford a monthly rent of €1,500.
Are we back to peak prices, then? Not yet. Rents peaked nationally in the fourth quarter of 2007, then fell by 26 per cent, to their lowest point, in the first quarter of 2012, according to the Private Residential Tenancies Board index. By the end of last year rents nationally were 17.8 per cent lower than they had been at their peak, in 2007. The peak-to-trough difference in the Dublin market was similar to that experienced nationally, but the strength of the recovery in Dublin means that rents are now just 9 per cent lower than their highest point.
Can we believe the figures? The Private Residential Tenancies Board's figures are compiled by the Economic and Social Research Institute and are widely considered to be the most accurate and authoritative on private rented accommodation in Ireland. They are based on the rent being paid rather than advertised rent.
