The rental crisis is showing no signs of easing. The latest Daft report reveals average new rental costs rising by almost 12 per cent over the past year and, remarkably, only 850 properties available to rent across the State. Not only are those seeking a new rental property facing rising costs, they will struggle to find a property at all.
From a position in 2019 when trends in the rental market seemed to be stabilising, things have again taken a turn for the worse. Extra supply is planned but is slow to arrive for a variety of reasons. Private landlords have been leaving the market, despite rising rent levels. The pandemic has changed some patterns and increased demand in some areas outside Dublin, but the picture of high rents and low supply is consistent.
The Daft analysis suggests that rents and rental inflation are lower for existing tenants. But high new rental levels have a significant social and economic impact, delaying housing formation, leaving people stuck in unsuitable accommodation for fear of giving up an existing rental agreement and hitting competitiveness. They are also a key factor in homelessness. There are few more important policy priorities, yet progress is slow.
More rental supply is of course the answer. Here the familiar arguments raise their heads about what models should be used and how delivery can be expedited. Such is the shortage that supply in all areas needs to be expanded as quickly as possible. Even adding in rental properties in build-to-rent properties – which can be hard to capture in availability data – Daft calculates that at best a few hundred extra properties may be available in addition to the headline figure of 850.
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There is a role for these developments, but also for other models. Cost rental developments appear a vital tool to serve a key part of the market, while social rental schemes are also important. The Government is pouring additional resources into this area and there are signs of some pick-up in supply, though much of this is aimed at potential house purchasers rather than renters.
The familiar constraint of the cost of building new apartments remains. For now, with a buoyant labour market, rental demand will remain strong, even if there are questions about the impact of slower global growth as the year goes on.
With housing supply starting to pick up, a key policy goal for Government is to ensure that is not stymied by rising costs or shortages of skilled employees. The promised review of the planning regime and particularly the delays caused in the courts is also vital.
And the structure of the rental market and the exit of many private landlords remains a concern, as does the use of many properties for holiday or short-stay rentals. The policy questions are complex, but what the public wants and expects is simple: a sense that the crisis is being brought under control.