Rents in Ireland have doubled in the past 13 years – by far the fastest growth in any major EU economy, a new Europewide study shows.
The average rent across the State is now €1,823-a-month, as one of the worst ever shortages of rental properties continues.
Over the period from 2010 to autumn last year, house prices also climbed 55% to an average of €382,500, the Eurostat report found.
Ian Lawlor, of Lotus Investment Group, which lends to developers, said: “While today’s Eurostat report shows that house prices in the EU continue to decline, Ireland has bucked that trend, with house prices up 1.4% in the year to the end of Quarter 3 2023.
“Although the Eurostat house price index shows that the annual rate of increase for Irish house prices is lower than it was in Q2 2023, all the indications on the ground are that Irish house prices will stabilise – and, indeed, gain momentum, this year.”
Only in Estonia (up nearly 225%) and Lithuania (up almost 175%) did rents rise faster than in Ireland.
The stock of properties available to rent or buy in Ireland remains “far too little”.
Mr Lawlor added: “Estimates suggest that the number of new homes built will likely fall short of the required demand, exacerbating the existing housing shortage.
“The housing stock for sale is now at its lowest level since the pandemic, according to a recent Myhome.ie report.
“The perennial problem of planning permission delays continues to overshadow the Irish housing market and must be addressed,” he said. “Simply put we need more houses to meet demand and more planning approvals so that more homes are built.
“Unless we find a way to put more shovel-ready sites across the whole of Ireland, our lack of supply will continue to stunt housing growth and add to the housing crisis.
“Legislators must take a closer look at what is holding up permissions and ask themselves if the rights of the thousands without homes, living with parents and so on are less than the rights of the far fewer number of planning objectors,” said Mr Lawlor.
Sinn Féin housing spokesman Eoin O Broin said plans for “more tax breaks for landlords will do nothing to address the crisis in the private rental sector”.
“The introduction of a new tax credit of €600 for landlords in Budget 2024 was a mistake and will do nothing to stem the flow of single property landlords from the market.
“We know this because of independent research from the Residential Tenancies Board and from the Department of Finance Tax Strategy Group,” said the TD.
He said the exodus “is due to a variety of reasons including landlords wanting the property for their own use, high house prices, landlords approaching pension age and landlords availing of capital gains tax reliefs introduced by the last government”.
Economist Ronan Lyons, of Trinity College Dublin, said in his recent report for Daft.ie: “There were almost 1,800 homes available to rent on November 1, a 64% increase compared to the same date a year previously.
“However, having just 1,800 homes on the rental market for a country that has, as of the April 2022 Census, at least 330,000 households in the private rental market is far too little.”
Experts say that house price growth will continue, fuelled by demographic trends, the potential for falling interest rates, and a strong economic backdrop.
Eurostat said: “Since the fourth quarter of 2022, house prices fell for two quarters in a row before rising again in the second and third quarter of 2023.”