The latest report on the rental market by property website Daft.ie shows that the spiral of costs for new rentals continues to rise. Ireland’s regional cities are currently hit particularly hard, where little or no new housing has been built in recent years to meet the strong demand. But prices continue to rise across the board. The average rental cost for new rentals is 1,922 euros per month, 7.3 percent more than in the same period last year.
Daft.ie’s figures relate to the cost of new tenancies, so they reflect the market faced by those renting for the first time or looking to move out of an existing tenancy. Those already on tenancies are seeing a smaller increase due to Rent Pressure Zone (RPZ) rules. And given the likely rent increase they would face if they moved, most are sticking with their existing tenancies.
The relentless rise in rental costs – only briefly interrupted in Dublin by the pandemic – means the cumulative increase since 2019 is a whopping 41 percent. Over the past year, rental growth in Dublin has moderated, likely due to new supply, but in Limerick rental costs have risen by 21 percent, while most other cities in the region are seeing double-digit increases.
The rental market is at the heart of the housing crisis and – as in all other areas of housing – increased supply is the only answer. Yet there seems to be a political ambivalence on this, with the preference being given to buying homes. Both are necessary for a well-functioning market and a mix of private and public funding is the only way forward, with many projects ultimately ending up as a joint venture between the two sides.
The solution to this problem is a long-term project that must include planning reform and the implementation of all other necessary regulatory and property tax measures. Otherwise, politicians will simply offer more “schemes” to step in where the market fails – with limited success.
Admitting that solving problems takes time is not attractive to politicians. But it is an essential step towards tackling the rental crisis.
