The Republic's rental crisis is having a "disastrous effect" on social cohesion and shows no sign of ebbing with rents in Dublin now almost 10 per cent higher than their previous peak in early 2008, according to Daft.ie.
The property website’s latest quarterly rental report shows rents rose nationwide by an average of 11.7 per cent in the year to September. This is the largest annual increase in rents ever recorded in the Daft.ie report, which began in 2002.
The report says there have been double-digit rent rises in 37 of the 54 markets analysed. This is up from just 17 markets as recently as late 2015. “This is having a disastrous effect on social cohesion as well as on Irish competitiveness,” it says.
In addition, at €1,077 in the third quarter of the year, the average monthly rent nationwide is at an all-time high.
In Dublin, the annual rate of rent inflation in the year to September 2016 was 12.1 per cent, which was its highest since late 2014. Rents in the capital are now 9.3 per cent higher than their previous peak in early 2008.
In Dublin 8 for example, the average rent for a three-bedroom home has risen dramatically and is now €1,800 a month, which is 10 per cent higher than the previous Celtic Tiger peak.
In Cork, rents rose by 14.4 per cent, a slight easing compared to earlier in the year. Rents in Galway are 10.9 per cent higher, while rents in Limerick have risen 13.2 per cent. In Waterford city, rents have risen 11.2 per cent, while outside the major cities the increase has been 10.9 per cent.
“The scale of the challenge here remains depressing,” says the report. “It has never been viable to build apartment blocks in the vast majority of this country.”
There were just over 3,600 properties available to rent nationwide on October 1st, the lowest figure for October since the start of the series. Two years ago, on October 1st 2014, there were almost 6,000 properties listed.
The report notes that the rise in living costs of almost three quarters in less than five years is “a symptom of strong demand for housing” as economic recovery continues and the population grows.
“But there is nothing inevitable about housing costs rising with demand,” it says. “That only happens when supply fails to respond, and the complete absence of any meaningful level of construction over the past five years is a systemic failure in desperate need of policy solutions.
"There is no more urgent task facing the Minister for Housing, his department and advisers, and the Housing Agency, than understanding why the costs of building, and building apartments in particular, is so dramatically out of line with our own incomes and indeed with the cost in other countries."