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Daft.ie’s latest rental price report, released this morning, paints a picture of a deeply dysfunction rental market, with record low levels of rental stock available, and with the cost of renting now significantly greater than the monthly cost of a mortgage in nearly all cases.
According to Daft.ie, at the start of November there were only 1,460 properties available to rent across the entire country. That’s down 65% on the same date last year, and represents the lowest stock of rental properties on the market seen since Daft started tracking that number in 2006.
Limerick City, which has a population of roughly 100,000 people, has just 9 rental properties, ranging from apartments to full houses, currently on the market.
In the last year rents have increased by an average of 6.8%; this is the 36th consecutive quarter where rents are higher than they were on the same date a year before.
In some cases the average monthly cost of renting is nearly 3 times what you’d expect to pay in monthly repayments on a mortgage for a property of that type. In Longford, for instance, the expected monthly repayment of a mortgage on a 1 bed apartment would be €220 – the average price to rent a 1 bed apartment in Longford was €622. There are currently only 19 properties available to rent in the entirety of Longford.
Whilst there are counties in which mortgage and rental costs are more closely aligned, particularly with respect to 4 and 5 bedroom homes, it is generally the case, outside Dublin, that the cost of renting a property will be at least double the average mortgage payments on a property of that type.
Ronan Lyons, an Associate Professor in Economics at TCD, says that the figures in the report “confirm a return to the pre-Covid-19 situation of weak supply in the face of very strong demand, due to underlying economic and demographic growth.” Lyons added that he understood some would “react to these trends with an understandable, if misplaced, search for easy solutions.” He said these solutions, particularly rent controls, do nothing to “address the reason why prices are rising – the lack of rental accommodation.”
The report notes that it appears roughly 100,000 rental homes will be built before 2030, and that this should act to lower rental costs.
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