A real good news/bad news report from property website Daft this quarter. The good news: At 6.7%, the rate of increase in Irish rents is finally slowing and slowing quite significantly.
The bad news: The people at Daft think it’s because people just can’t afford to pay any more than they are paying.
According to the report’s author, Trinity Economist Ronan Lyons:
“The slowdown in rental inflation will be welcome news to tenants and policymakers, among others.
“It is more likely driven by limits to affordability than improved supply, however.
In plain English, that means rents have finally reached the point where people can’t afford to pay any more than they are paying already.
There are, in short, no more houses, although Daft do say that they expect 25,000 rental units to be added to the market over the coming years.
In Dublin in particular, the increase in rents was 13.7% last year, but is only 4.5% today. But to put that in context, the average rent in the capital is now over €2,000 per month. In rural Connaught/Ulster, by contrast, rent increases are still rattling along at about 12%, but the average rent is much lower.
In the cities, rents have increased by 7.9% and 9.1% in Cork and Galway respectively, with average monthly costs of €1,366 to rent a home in Cork. In Limerick and Waterford, rents were up by about 10% in each.
The supply situation has not improved either: In Dublin, there were just 1,541 properties available to rent on August first, according to Lyons. This is down, he says, from an average of 4,700 properties per month over the decade before the housing crisis began.
The crisis, obviously, is at its worst in Dublin, and the figures reflect that. As Lyons says, it is simply the case that in the capital, very few people can afford the rents at the level they are currently at, let alone any increases. Where there is scope for rents to rise, they are still rising.
Maybe it’s time for a second look at Harry Crosbie’s plan to reclaim enough land from Dublin Bay to build 65,000 new homes?
The developer is proposing that the inlet next to Clontarf be transformed into 250 acres of land where four-, six- and eight-storey housing blocks would be built. In the Netherlands polders are a piece of land in a low-lying area that has been reclaimed from a body of water by building dikes and drainage canals.
Mr Crosbie also suggested diverting the River Tolka and creating a Luas line to the area from The Point stop.
He said a number of specialists in this type of construction have offered to help with reclaiming land from the sea.
“You’d do away with all this stupid nonsense of social housing, affordable housing, whatever… This would become a place you would die to live in.”
It’s……not the worst idea, is it? Certainly more original than anything the Government has come up with over the last few years.