Rents across Cork city and county are at the highest level they have ever been, while the housing supply, both here and across the country, is “plummeting”.
This is according to the latest Daft.ie rental report, which was published today. It shows the average cost of renting a house or apartment in Cork city now stands at more than €1,100 a month.
As such, renting in Cork city is now 10% more expensive than it was this time last year.
In Cork county, renters are now paying an average of €806 a month – a jump of more than 13% in the last 12 months alone.
Nationwide, rents rose by an average of 13.4% in the first quarter of this year. The average rent across the country is now €1,131. It is the fourth quarter in a row that a new all-time high has been set.
Leading economist Ronan Lyons said the rental market here, and across the country, continues to show increasing signs of distress, with stronger demand but weaker supply every single year.
He also criticised the Government's introduction of Rent Pressure Zones - its latest initiative to curb the ever-rising rents.
Under the scheme, which is in operation in a select number of areas across the country, landlords implementing rent hikes can only raise rents by a maximum of 4% each year.
“In a market where most leases last just one year, this kind of measure captures trends in the full rented sector well. However, if people choose not to move as regularly, it is better to think of the rented sector as divided into two categories – movers and stayers,” said Mr Lyons.
“And one of the main reasons people choose not to move regularly is if rents are rising rapidly. Therefore, the Rent Pressure Zones measure could be mixing things up – using rent trends paid by movers (market rents) to control rents paid by stayers (sitting rents).” Since 2013, for example, market rents nationally have risen by just over 50%. Sitting rents, however, have increased by just 27%. In other words, those who have stayed in the same lease have enjoyed a discount relative to market rents.
“This may mean that the Rent Pressure Zone system makes things worse, rather than better, by amplifying the insider-outside nature of the rented sector,” said Mr Lyons.
“Sitting tenants now enjoy not only a discount relative to the market rent but also protection of that lower rent into the future. Meanwhile, movers in the private rented sector face not only far higher rents but almost no availability in the market.” Mr Lyons said the message from the rental market to policymakers is the same as it has been for over five years now - more supply is needed.
“Regulatory measures designed to limit rent increases could only ever have a very limited effectiveness in a market with such a scarcity of supply,” he said.
“The more appropriate solution remains to increase supply. This includes both making better use of the existing stock of housing and building substantially more, in particular more apartments.”