Rental crisis deepens as prices up 6.5 per cent in first quarter

Rents rose by 6.9 per cent nationwide in the year to the end of March, according to new figures published by the Private Residential Tenancies Board (PRTB)..

The latest PRTB Quarterly Rent Index, which is compiled by the Economic and Social Research Institute (ERSI) indicates that rents for houses rose 6.5 per cent while apartment rents increased by 7.8 per cent.

In Dublin, where costs are usually higher, house rents were up 9 per cent in the year with apartment rents jumping by 10.8 per cent. Outside the capital, rents remained more subdued with house rents up 5.7 per cent and apartments rising by 5.2 per cent.

In monetary terms, the rent for private sector accommodation across the whole country rose €54 in the year from €781 to €835. The rents for apartments increased on average by €63 in the 12 months to the end of March while rents for houses were up €49 to €814.

In Dublin, the average cost to rent was €1,325 for a house and €1,205 for an apartment. This compares to €1,215 and €1,087 respectively for the same period a year earlier.

Outside of the capital, rents rose by €36 to €647 to rent a house and by €31 to €627 for an apartment.

Nationally monthly rents for houses rose by 2 per cent compared to the previous quarter while rents for apartments were up 1.3 per cent.

According to the PRTB, the latest findings suggest the driver of growth changed during the first quarter with rents outside of the capital showing a stronger rate of increase than Dublin rents.

For properties outside of the capital, rents were 1.5 per cent higher than in the three months to the end of December. The growth was primarily due to a surge in rents for apartments, which rose 2.1 per cent. Rents for houses outside of Dublin were up 1.6 per cent as against the fourth quarter of 2014. Rents in Dublin were 0.6 per cent with the average cost to rent a house increasing by 2.7 per cent and apartment rents going up by 0.8 per cent.

Private accommodation rents nationwide remain 16.9 per cent lower than their peak, which occurred in the final quarter of 2007. The Rent Index shows that, nationally, rents peaked in the fourth quarter of 2007 before declining by 25 per cent to their trough in the first quarter of 2012.

The strength of the recovery in the capital means that rents are now just 7.5 per cent lower than their highest point. In contrast, the market outside Dublin has experienced more subdued growth, and rental levels remain nearly 22 per cent off their peak levels.

The overall number of tenancies registered with the PRTB as at the end of the first quarter was 308,096 with 23,960 new registrations recorded during the period January to March.

The Simon Community said the latest figures were extremely worrying and called for immediate action to be taken to address Ireland’s worsening housing crisis.

“With 10,000 people moving into rental properties each month, and supply of rental accommodation at its lowest level in a decade, urgent action is now needed to address a housing crisis that is pushing thousands of people to the edge of homelessness,” said the charity’s national spokeswoman Niamh Randall.

Elsewhere, estate agent Savills said that while house prices in Dublin have risen 40 per cent sine the market bottomed-out in 2012, a simulatenous increase in rent has limited any decline in residential yields.

“While deposit rates have fallen by 28 per cent since the end of 2012, property yields have held up better due to rental growth. This relative swing has diverted money into bricks and mortar, and this will continue,” said the company’s director of research John McCartney.