We may be in the midst of the fiercest August heatwave in two decades, but it is baltic out there compared to the apocalyptic temperature of Ireland’s housing debate. This week’s dismal rental report from property website Daft was enough to send half the country into meltdown. Let’s chill for a minute.
It may seem a little pedantic to point this out, but Daft’s regular updates on the state of the rental market are routinely misreported. All of us have been guilty of this sin at some point, and most committed it this week. Accuracy matters in such a febrile climate.
It is not correct to state, as Daft does in its press release, that “nationwide, there were just 716 homes available to rent on August 1st”. It is such a stark and exact figure that it brings its own air of authority. The truth is that it is not known exactly how many homes were available for rent nationally on that date.
There were 716 entire homes available for rent that were advertised on the Daft website, for that is the only comprehensive data sample available for the report. But clearly there must have been other homes – how many, we do not know – that may have been available for rent on August 1st but which were not advertised on the website on that specific day.
Some homes may be available for rent in informal arrangements where the landlord, or perhaps a prospective tenant, might want to keep it off the books. Usually, the possibility of such an arrangement would not be publicly advertised. Instead, they are reached through word of mouth spread between people who may already know each other, or who know someone who knows someone.
I am not suggesting that the figure for off-market transactions is substantial or even material in the grand scheme of things, especially for entire properties. Most likely it is of some material impact only when it comes to assessing the true availability of house shares, which are popular with young people and students, immigrants and transient workers. But off-market tenancies do happen, which means they must also end and are refilled as they become available. By design, they are not in most data sets.
The second, more important, tranche of properties that are available to renters but which would not show up in Daft’s figures are a portion, again unrecorded, of homes in multi-unit rentals (MURs, to use the terminology from the Daft report). These are usually apartment blocks, or occasionally new house estates. If you are an institutional investor who buys a block of 30 almost identical homes in the one new development, you don’t put up 30 ads on Daft. You might put up a single ad for them all, and hence Daft counts your 30 homes as one home available for rent. Perhaps you advertise elsewhere.
The report’s authors acknowledge the MUR issue in the title of one of the report’s graphs and in some of the commentary attached to the figures. But that acknowledgment does not stretch to the rather more definitive statements about the available stock in the press release. Anybody who writes newspaper headlines knows the score on this – you can generalise for brevity but you also know the limitations of such statements.
The Daft report attempts to deal with the issue by separately estimating the occupancy rate of the 7,500 MUR homes (itself an estimate) from public records of registered tenancies. The report suggests just 5 per cent of these units are vacant, and thus, presumably, still available for rent. That means at least a further 375 units may have been available for rent on August 1st but were not captured in the Daft numbers, assuming the 7,500 is accurate. It might be more – there is just no sure-fire way to tell.
Nobody in the Department of Housing is going to break out the champagne corks at those figures. Clearly, all is not solved – it is still but a drop in the ocean of the rental crisis. But it is enough to knock the “only 716 homes for rent” talking point off by a factor of at least 52 per cent. That discrepancy ought to be seen as material by people who routinely wave reports like Daft’s at each other in heated debate.
The number of institutionally-owned MURs, considered unwelcome by some but to others a necessary source of new and stable rental stock, will grow quickly in the coming months and years. That means their ability to skew the accuracy of data sets that exclude them will grow, too.
Another aspect of reports such as Daft’s that, strictly speaking, may not be misreported or misrepresented, but which is often misinterpreted by the public, is the trajectory of national rents. “Rents rise nationally by 12.6 per cent,” said the Daft report, and also much of the reportage that followed this week.
That sort of number tends to frighten the life out of the people living in the nation’s 300,000 or so private rental homes, or more pertinently, among those who want to live in one of them. A casual reader might conclude that everybody’s monthly rent went up by an eighth over the reported quarter. But, of course, that isn’t the case at all, nor do the Daft report’s authors suggest that it is in some of the more detailed commentary inside the report.
What rose by 12.6 per cent was the asking price for rents on new tenancies in that quarterly period (by definition a tiny sample, if you are going to argue that only 716 homes were available to rent at any one time). All rents did not rise by 12.6 per cent, only new ones did. The tenants in the overwhelming majority of the 300,000 private rented homes stayed put during the quarter, and so are not captured in the figures. Their rents likely rose by a fraction of the 12.6 per cent, especially if they live in one of the 54 heavily price-regulated rent pressure zones, covering most major urban areas and some rural ones.
This is not an attempt to play down the rental crisis. As the Daft report suggests, it is not the raw figures themselves that matter so much as their trajectory. Even with their inherent limitations, the numbers in the Daft report very clearly suggest that the rental crisis is getting worse – as bad as it has ever been.
As more Ukrainians and other refugees move on from temporary accommodation, and as students return to the cities after the summer break, the debate is going to heat up further as its true scale becomes fully apparent. Anybody thrust into the current rental market will understand how bad it is. They don’t need a report to tell them.
But let us also appreciate the inherent limitations of the data available, especially as the figures are weaponised in the media and politics war over housing. Numbers don’t always mean what they appear to suggest.