Rents Rise Across Ireland In Third Quarter
News Posted On: 25 November 2014
Housing rents are now more expensive than this time last year in every county in Ireland. Nationally, rents have risen by over 11% in the last 12 months: the national average rent is now €933, as against €842 a year ago.
Dublin’s annual inflation has slowed for the first time in five years, but prices have still risen by over 14% in the capital since the final quarter of 2013.
Price climbs continue in other city centres too. Waterford saw a 5% year-on-year increase, Limerick 6%, Galway 7% ad Cork 8% rises. Most of the counties immediately adjacent to Dublin saw double digit rises too: Meath prices rose 11%, prices in Wicklow are up 13% and Kildare prices are up 14%. That points to Dublin’s having reached ‘rent saturation,’ and suggests renters are looking for homes outside, but close to, the city, for commuting purposes.
As rents rise, inventory is falling fast: there are now fewer than 5,400 properties available to rent nationwide, the lowest figure since May 2007.
Commenting on the news, Ronan Ryan, economist at TCD, said, ‘in many ways, the lack of available properties to rent is more concerning than the high rental rates, although clearly the two phenomena are inextricably linked. The only silver lining is the fact that this quarter was the first time in five years that rent inflation in the capital eased somewhat. However, even if an easing in Dublin inflation continues and stops the affordability crisis from worsening, it does nothing to change the availability crisis.’
Behind the rise in rents is a rise in prices. If there’s an affordability crisis in rents, one reason is that more people are renting because prices are climbing out of their reach. Ireland’s property prices are rising fast.
Prices of properties in Dublin have seen annual rises of 18% in North County Dublin, and 29% in the city centre – runaway increases that have commentators worried.
Cork and Galway saw purchase prices rise by 11% and 13% respectively, implying that there may be worse affordability problems to come in the rental market as purchasers pass on higher costs: rental increases aren’t keeping pace with price increases.
There’s a looming problem in the purchase market too. Mr. Lyons observes that, ‘the total number of properties on the market on October 1 was just over 30, 000, the lowest figure since March 2007. Across Leinster, and in Dublin in particular, supply shortages remain and this has helped push up values by a third in Dublin in just two years. The concern is that this supply shortage is now feeding into expectations.’
Figures bear that out: A survey of over 1, 000 potential homebuyers across the country found that they overwhelmingly expected prices to continue to rise in the next 12 months, by an average of 12% in Dublin and an average 6% outside of the capital.
‘While price rises driven by shortages can be stopped by increasing supply, tackling price rises driven by expectations is significantly trickier.’
Written by Les Calvert of www.property-abroad.com - overseas property reporter
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