Rory Hearne: Rents are now 100% higher than in 2011
Rents have gone up 100% over the past decade, according to Dr. Rory Hearne.
The assistant professor of social policy at Maynooth University was speaking as a new index shows rents for new rentals rose 9% nationwide last year.
The Residential Tenancies Board (RTB) says the index is based on actual rents paid on 9,346 private rentals newly registered with the RTB during the fourth quarter of 2021.
Dublin and the Greater Dublin Area accounted for over half (55.2%) of all new rental contracts – 59.7% of new rentals were for apartments.
Rents for new rentals in Roscommon have increased the most – with a quarterly growth rate of 12.6%. While rents in new rentals in Galway saw the biggest quarterly decline, down 11.2%.
Nationally, the standardized average rent for new rentals was €1,415 per month, down €4 from a year earlier.
Rents in new rentals in Dublin were significantly higher than those outside Dublin – at €1,972 per month, compared to €1,104 per month.
While 13 counties had standardized average rents in new rentals above €1,000 per month: Carlow, Cork, Dublin, Galway, Kildare, Kilkenny, Laois, Limerick, Louth, Meath, Waterford, Westmeath and Wicklow.
He notes that there was a 48% reduction in the number of registered rentals used in the 2020 sample.
Dr. Hearne said Newstalk breakfast it is deeply disappointing.
“Just to put some of these numbers into context… In 2011, that was the low point when rents hit after the crash, they went down to around €985 a month.
“They are now almost 100%, just passed 100%, increasing – so we are now seeing rents doubling in a decade.
“And people’s salaries haven’t gone up; they’ve only gone up a fraction of that since then.”
Dublin rents are now 100% higher than in 2011.
€985 to €1972.
Addition of €12,000 per year of additional rent to be paid.
It’s a cost of living crisis!
The government ignored calls to freeze rents the following year to suit investor fund REITs.
Failure to provide affordable housing#rent freeze pic.twitter.com/RTQCsxLhXW
—Rory Hearne (@RoryHearne) April 27, 2022
He says the key issue is supply and the government should step in.
“The problem is that the private market does not provide sufficient supply.
“And also the new supply coming into the private market is very expensive – properties to be built are coming in at 2,000 a month – which drives up those average rents.
“The problem comes back to the failure, year after year, of the government to build enough social housing or enough rental housing.
“Homeowners are leaving the market…and since the number of homeowners started to increase, I’ve been advocating that the state should buy these homes.
“If landlords want to get out of the market, if they don’t find it profitable for them, the state should have a program where they offer those landlords to buy homes – and so they would keep the leases in place and keep tenants in place”.
“Cash in their investment”
Dr. Hearne says there are several reasons why private owners leave the market.
“What is driving homeowners out of the market is the massive increase in property prices over the past 10 years.
“Landlords are essentially profiting from their investment asset…or what’s happening is they’re actually evicting tenants and then converting the rental property to Airbnb.”
He adds that this scenario is about maximizing returns, not homes.
“The private rental market is about landlords maximizing their return on investment, it’s not about homes.
“When measures are put in place to protect tenants or to cap rents in favor of tenants to make them affordable, some landlords say ‘I’m not making enough money from this, so I’m going to sell’.
“But this to me shows the fundamental problem of relying on so much of our housing market now on the private rental market.”