Sharp spike in rent as Dublin average nears €1600, report shows
Residential Tenancies Board says rent registry would bring ‘transparency’ for new tenancies
The new data for the first time draws a distinction between existing and new tenancies and shows a substantial divergence between rates of increase for sitting tenants and those looking to rent for the first time. Photograph: iStock
The cost of renting a home in Ireland continues to rise with new figures pointing to sharp spikes in urban areas and average monthly rents in Dublin of almost €1,600, an increase of nearly €130 in 12 months.
The new data for the first time draws a distinction between existing and new tenancies and shows a substantial divergence between rates of increase for sitting tenants and those looking to rent for the first time.
The Residential Tenancies Board (RTB)is seeking powers to introduce a rent registry which would allow “transparency” for new tenancies.
Director Rosalind Carroll said many people still do not know the rules of rent pressure zones and think the 4 per cent cap on annual rent increases applies only to existing tenancies.
Asked how new tenants would know if the rent for the property had increased more than 4 per cent , she said landlords are obliged to tell them what the previus rent was. But she said “the transparency is an issue”.
“So what we’re doing at the moment is working with the Minister and the Department officials to try and get legislation through that will bring that transparency - a rent register.
“A rent register is prohibited, until that law is changed we can’t do anything.
“We’re also going to get new powers that, instead of waiting for tenants to come to us, will allow us to proactively go out, investigate and sanction, where we see any contraventions in the law,” she told Morning Ireland on RTE Radio.
Tenants can take cases retrospectively if they agree to a rent unknowingly, she said. They can then go to the RTB which will push to have that rent backdated, she said.
The figures, produced in conjunction with the Economic and Social Research Institute (ESRI), are based on 18,716 new tenancies registered with the RTB. They show that between April and June the national average monthly rent was €1,094 up from €1,017 in the same period last year.
The figures now separate long-term leases renewed by sitting tenants from other registrations with separate averages calculated for both.
The average monthly rent for new tenancies was €1,183 compared with €930 for renewals, with the year-on-year growth for renewals registered with the board said to be 4.9 per cent, compared with 8.4 per cent for new tenancies.
One in five registered tenancies in the second quarter was a renewal, up from one in 10 two years ago, suggesting that people are more likely to stay in the rental accommodation they have rather than seek somewhere new to live.
Annually, rent increases were put at 7.6 per cent with Dublin as a whole recording increases of 8.8 per cent and the Dublin city area seeing rises of 9.5 per cent.
“We are putting these figures together so we can now monitor what is going on in the market,” she told RTE.
Having this information will be of assistance in taking action against landlords when new legislation is introduced, she said.
Ms Carroll pointed out that a renewed information campaign will highlight the fact that new tenancies are covered under Rent Pressure Zone legislation. “It applies to all rental stock. Landlords are obliged to tell you the previous rent.”
Transparency is an issue, she acknowledged.
Until such time as a rent register is introduced the RTB is restricted in what it can do, she added.
“We want to be able to actively go out and see what landlords are doing.”
Speaking later, the chairwoman of the housing rights charity Threshold said she would support the introduction of a rent register. “There is no clarity (of the rental market) because there is no rent register and tenants cannot enforce their rights,” Aideen Hayden told RTE’s Morning Ireland.
When asked why there was not a rent register, she said: “We see no reason why not. Until we have it we won’t see proper enforcement of the Rent Pressure Zone,”she said. “We need to keep people in their homes.”
Controlling rents is a much more efficient method of tackling the upward trend in rents, she added. “Unless we tackle the trend of upward rents we are going nowhere in tackling homelessness.”
The problem is that the vast majority of people who are ending up homeless is because they are coming from the private rental sector, said Ms Hayden.
An increase in rent supplement and HAP payments in 2016 had been welcome, but since then the trend of “topping up” had grown again because of increased rents and this is not included in the RTB data, she claimed.
Ms Hayden also called for the Government to look at the tax breaks it gives to institutional investors. “They are dealing with the top end of the market, they are pushing rents up and putting severe pressure on rents, but doing nothing for people at the lower end of the market.
If there are going to be tax breaks they should go to those helping the lower end of the market, she said.
The annual growth rate outside the greater Dublin area (GDA) was 6.3 per cent, down from 6.5 per cent in the first quarter.
The average rent in the GDA is now €1,587, a monthly increase of €128 over a 12-month period. Rents in Dublin city stood at €1,549, which is due to the smaller size of accommodation available in the area.
The average rent outside the GDA and Dublin city was put at €817, up from €768 a year earlier.
The second highest rents in the second quarter of the year were in Cork city, where the monthly average was €1,123 (up 6.2 per cent in 12 months). On an annualised basis, rents in Limerick city have been growing fastest, up 12.4 per cent the second quarter to an average of €880.
The average rent in Galway city stood at €1,065, while the average in Waterford city as €646.
“Affordability remains a significant issue in the rental market with continued economic and population growth contributing to rising demand,” said RTB director Rosalind Carroll. “We can see rents have continued to increase with growth rates back up in Dublin.”
She said additional analysis had given the RTB “more insight into what is driving growth, particularly in rent pressure zones”.
Ms Carroll suggested that the rate of rental inflation year on year for existing tenancies was 4.9 per cent which “shows that rent inflation in existing tenancies is more in line with what we would expect to see in rent pressure zones”.
She said the substantially faster rate of increase for new lettings made it “clear that this market must continue to be monitored and it underscores the importance of the proposed legislation in this area”.
Minister for Housing Eoghan Murphy said people were “paying too much in rent and this has to be better controlled”.
He said he would shortly be introducing new rent protection measures in the the Dáil. “I’ll also continue to pursue measures to see longer leases and tenant protections when properties are sold,” he said, adding that there were some signs of stability but “still a way to go”.