The Irish Times view on the rental market: the rent trap generation

If you can’t afford to buy a home, renting is cheaper. That was the age-old rule of thumb, but it not longer applies. According to figures in Daft’s most recent rental report, repaying a mortgage on a typical three-bedroom home is now less expensive than paying rent in nearly every region in the country. Only in the two most expensive areas to buy property – Dublin 4 and Dublin 6 – is repaying a mortgage on a typical home more expensive than paying rent.

The same report suggested the average monthly asking price for rent nationally stood at €1,477 in the second quarter of 2021, up 5.6 per cent year on year and almost double the €742 figure recorded in 2011. The average monthly asking price in Dublin stood at an eye-watering €2,035.

And this is happening at a time when mortgage rates have never been cheaper and when Ireland, for the first time, is seeing an increase in European style, long-term fixed rate mortgages. The situation is compounded by the fact that many young people are earning less – in real terms – than their counterparts did in the 1990s and 2000s. As a result many naturally feel themselves trapped into paying an increasing share of their income on rent while unable to save for a necessary deposit to buy. This catch-22 situation has become a defining feature of life in Ireland for young people. "House prices are rising too fast and rent would eat up any money I'd try to put away for the deposit," one person told this newspaper in recent days.

The knock-on effect of this increasingly difficult financial equation is plummeting home ownership rates. As recently as 1990, Ireland had one of the highest rates of home ownership in Europe at almost 80 per cent. At the last census it was 67.6 per cent, lower than the EU average of 69.2 per cent. It's likely to have declined since.

The Irish Times view on the coup in Sudan: democracy delayed

---

The Irish Times view on harassment in the arts sector: extensive and deep-rooted

---

The Irish Times view on reopening the hospitality sector: anomalies are part of the deal

---

The Irish Times view on the hybrid car grant: pulling the plug

---

A major driver forcing behind the rental crisis is supply. Daft noted that just 2,455 homes were available to rent nationally on its website on August 1st last, the lowest number since its quarterly series began in 2006.

Governments here and elsewhere have, over the past four decades, stopped building social housing to the same degree and decommissioned a significant portion of the existing stock by transferring them into the owner-occupier sector.

But with prices and rents rising, more people are in need of subsidised housing. Governments have therefore attempted to fill the gap with rent supports, which sees welfare recipients, who were formerly accommodated via social housing, in direct competition for tenancies with private renters. The result is upward pressure on rents and a renewed focus on rent controls. The leader of Germany’s Ver.di trade union recently called rent the 21st-century equivalent of bread prices, the historic trigger for social unrest. What is certain is that Ireland’s rent crisis is failing a whole generation of its citizens.