The recent analysis by property portal Daft.ie demonstrates the constant growing trend of new rental prices. This increase notably affects Ireland’s regional cities that have been suffering from a lack of new properties in response to high demand over the past few years. However, an increasing trend is noted universally, with an average rental price of €1,922 a month, a 7.3 per cent increase from the previous year.
The statistics presented by Daft.ie focus on the cost of new tenancies, hence it mirrors the market circumstances faced by individuals looking to rent for the first time or those wanting to shift from their ongoing tenancy. Individuals currently in rental agreements are experiencing a lesser increase courtesy of rental pressure zone (RPZ) regulations. With a probable surge in rent upon moving, many choose to retain their current leasing contracts.
The constant hike in rental prices – briefly paused in Dublin due to the pandemic – means that the total increase since 2019 has been a considerable 41 per cent. In comparison to the previous year, the rise in rents in Dublin has been tempered, likely due to some new offerings. However, rental prices in Limerick have seen a leap of 21 per cent, while most other regional cities are showcasing double-digit growth.
The rental sector sits uncomfortably at the heart of the housing crisis, and like all housing aspects, the only solution is an increase in supply. Nevertheless, there seems to be an ongoing uncertainty in policy-making, with buying homes seemingly prioritised. Both rental and buying opportunities are required for a well-functioning market. It is thus imperative to work towards a blend of private and public operations, with numerous projects essentially becoming a combined effort between the two parties.
Tackling this issue requires long-term planning which undoubtedly needs to include planning reform and the assurance that appropriate regulatory measures and land tax systems are in place. Without this, policy may simply end up with more “schemes” aiming to compensate for the failing market with limited effectiveness.
While politicians may find it difficult to admit that such issues need time to be resolved, it is a vital move towards solving the current rental crisis.