Higher And Higher

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From a Daft.ie report published today

Daft.ie has published its report on rental market trends for the third quarter of 2016.

It finds:

The average rent nationwide rose by almost 4% in the third quarter, equalling the largest three-month increase seen in the second quarter of the year.

Combined with other recent increases, it means that the annual rate of rental inflation in Ireland is now 11.7%, the highest recorded by the Daft.ie Report since its series start in 2002.

Read the report in full here

Previously: Certainty In A World Gone Daft

34 thoughts on “Higher And Higher

    1. Martin Heavy-Guy

      The people who are renting are not voting (generally) for either FG or FF. They are elected by an older population that make up a large enough majority to form government. With 60% voter turnout that means about 20% of the country needs to support a party for them to win majority. I’m sure landlords and second property owners make up a tidy chunk of that 20% – the rest (the volatile young vote that swings toward the next promise just to have a chance at removing these clowns) doesn’t matter a bean to any of them as long as they can maintain that 20%.

      1. Boy M5

        You’d be surprised how many Hispters are Fine Gael voters. Quite a few. Those pop-up pallet furnished metro tiled restaurants (fast food takeaways) are owned by Young Fine Gael types and their mates are their customers. Don’t be fooled into thinking they’re progressive.

        1. Martin Heavy-Guy

          I’m not. But I’m also not talking about those that own businesses, I’m talking about students who move to large cities and have to rent. But to FG that’s not the issue. They just need to meet the quota, no matter how. And as long as there is no viable alternative that can unite the disaffected vote they or FF will retain power.

  1. Fact Checker

    It is worth reading the accompanying commentary from Ronan Lyons (quoted in part below).

    He is 100% correct on the need to densify EXISTING development and to do something to bring down the very high cost of apartment building.

    “The shortage is particularly acute when it comes to apartments in the Dublin area. Apartments are a pressure point for demand, as they offer options for downsizers, students and other one- and two-person households. It is this size of households that will form the bulk of new demand, Ireland matches trends in other high-income countries, with dwindling household size………. Ireland has lots of “non-families” in family homes. The best way to bring around a reallocation of housing stock in Ireland – consistent with political reality – is to tempt these non-families out of family homes……. Ireland is not at all immune to NIMBYism and its excuses for pushing development onto greenfield sites, rather than in already built-up areas such as suburbs and market towns. However, it is precisely the densification of our suburbs and towns that Ireland needs.Local authorities should be required to set targets for particular types of property, including for apartments blocks suitable for older households and for purpose-built student accommodation if relevant. Options for fining them for refusing to allow necessary development should also be explored………….The second challenge is construction costs……….It has never been viable to build apartment blocks in the vast majority of this country. Where it has been built, it has been due to subsidies (in the case of social housing) or extraordinary tax incentives (in the case of Section 23 disease). There is no more urgent task facing the Minister for Housing, his department and advisers, the Housing Agency and others involved in ‘Rebuilding Ireland’ than understanding why the costs of building, and building apartments in particular, is so dramatically out of line with our own incomes and indeed with the cost in other countries.This latest report highlights that, without addressing that, rents will continue to rise and further damage Irish competitiveness and Irish social cohesion.”

    1. Martin Heavy-Guy

      Fair point, but this is only a small part of the problem. Ronan Lyon’s observations on high cost of building property are accurate, but that cost is nowhere near the resale value that has been reached. The problem as I see it comes down to the below:

      1) There is very little legislation to stop landlords increasing rent as they please, or renting new properties at high prices, which pushes the overall supply price up. As the average increases, other landlords see the possibility of higher prices, but can justify increases by saying they are staying in line with averages. This is something that needs regulation and real legislation: It is not the cost of a bottle of coke or a cup of coffee that is in question, it is the ability for families, young people and poor people who cannot afford to own one, let alone two houses, to put a roof over their heads.

      2) Banks have been insisting on rent increases as part of meeting mortgage agreements. This insistence is designed to force young renters into considering the comparatively cheaper option of buying a house. Buying houses = more mortgages for banks, which suits the wealthiest among us (those that caused the financial collapse that started this whole chain of events) but continues to punish the poorer (putting them in a position where renting is no longer an option, so if a mortgage is not within their means they have no options left).

      1. Fact Checker

        “1) There is very little legislation to stop landlords increasing rent as they please”

        Nonsense. Late in 2015 legislation was passed to prevent landlords from raising the rent within the first two years of a tenancy.

        1. Martin Heavy-Guy

          That is very little. I didn’t say there was none. And if you look at the post above, you can see how little a difference this has made since 2015.

          1. Fact Checker

            Actually there is more. Landlords now have to make a statutory declaration that the new rent is representative of average rents for equivalent properties in the area and provide evidence of same.

          2. anne

            A statutory declaration huh? ‘I hearby declare you’re rent is going up, in line with all the other properties in your area’.. that sorta declaration?

          3. anne

            Statutory declaration huh? Sounds serious…’I declare you’re rent is increasing in line with the other gougers in your area’ sorta declaration?

          4. anne

            If anyone’s interested..here’s what the spoofer is referring to :

            From 9th May 2016 there are additional requirements where a landlord is seeking to reviewing the rent:

            They must provide you with at least three comparable rents of similiar properties in your area which have been advertised in the previous four weeks to your review. The written review must also advise you that if you wish to dispute the review you can refer a case to the RTB within 28 days of reciept of the notice or before the date when the review is to take effect. whichever is later.

            http://www.threshold.ie/advice/dealing-with-problems-during-your-tenancy/how-to-deal-with-rent-increases/

          5. Martin Heavy-Guy

            I’m aware of the legislation that has been brought in, but I repeat my point above – it is very little. And more importantly, it is not working.

            The declaration that you are referring to is a lip service and serves no purpose. Take a quick hunt on daft.ie and you’ll see the result of that – landlords may be obliged to give the statement, but nobody is monitoring it to check any validity so the prices are still skyrocketing. And as long as they do, other landlords become legitimised in their own statements by reflecting the increases made by their predecessors who put ridiculous rent on properties.

            And more simply, I return again again to the post above, which we are commenting on – rent prices are increasing dramatically. Homelessness is out of control in Dublin and getting there in other major urban areas. If the legislation was having any effect then this crisis would not be happening.

            If you are lucky enough not to be renting, and are removed from this, then maybe you should speak to some people who are, and ask them how the legislation has helped them over the past 18 months. I would start with the 2,500+ people who are currently homeless in Dublin. Most of them would have some opinion to give, I’m sure.

          6. Fact Checker

            There is a LEGAL obligation on landlords to provide this evidence and if they do not the tenant can take them to the RTB to dispute it. Thank you Anne for pointing us to this.

            We simply cannot tell if it is having any effect on rents yet because all rental indices (daft and CSO) are generated from new rentals only.

            I know of several instances at the moment where tenants are paying appreciably below what the open market would charge because of the two-year rent freeze.

            Anyway, rent control is all deckchairs on Titanic stuff. Prices are inevitably set by supply and demand conditions. Demand is strong right now and supply is unresponsive. It’s a pity most participants in the debate cannot focus on the reasons for the lack of supply.

          7. Martin Heavy-Guy

            Supply and demand is no reason to force people out of their homes – what you are referring to is greed. We are talking about human beings here, not money. Shelter is a basic human need. Whatever you can say about needing more properties, the first thing to do is make sure the properties that exist can be rented by those that need them.

            But this does feel like talking in circles so I don’t see much point in hanging on to this thread…peace out.

          8. Fact Checker

            Likewise.

            I fully agree that shelter should be a human right.

            The current approach to those with chronic housing need (at least in Dublin) is not working at all.

  2. Horsebox

    not necessarily advocating this as i dont know enough about it but….
    Such cities such as San Fran and New York – have rent control and the Good old US of A is hardly a bastion of people over profit.
    So what were the arguments why we cant to it again?

    1. Fact Checker

      Because you end up with tenants with properties well in excess of their needs hanging on to them forever because the rent is low.

      This is neither economically efficient nor socially equitable as it keeps tenants with greater needs out.

      1. ahjayzis

        So what’s your solution?

        That appalling vista you lay out still sounds better than a homelessness epidemic, kids spending their childhoods in hotel rooms and out and out extortion?

        1. Fact Checker

          There are tens of thousands of empty dwellings in Ireland which are worth less than their build cost.

          None of them are in Dublin though.

          Many of these dwellings could be used for social housing.

    2. Andy

      New York rent control is not what people believe it to be.

      It is the very definition of looking after insiders. Similar to the problems in Dublin, those who own properties don’t want the value to fall which impacts the lives of those new-comers to the market.

      There are two types of rent control in NYC (i) full on rent control (derived from a post-war housing emergency) and (ii) rent stabilization. For a rent control property the tenant must have been in situ since the 1970’s. When they vacate, the apartment becomes rent stabilized (unless they pass the apartment to another member of their family). Rent stabilized is another section of the market which relates to buildings of a certain size built between the war and the 1970’s.

      Basically when a tenant exits a rent controlled apartment it becomes rent stabilized or deregulated. When a tenant exists a rent stabilized apartment it becomes deregulated.

      The kicker is, tenants in these apartments are able to pass the lease & appropriate rent regulation onto a successor relative. So, while regular people moving to the city can’t avail of it, the offspring of those benefiting from it are able to avail of it.

      New buildings built since the 1970’s are not subject to rent control or stabilization (unless they are availing of certain tax breaks). So, there are no new rent controlled stock coming on stream.

      1. Fact Checker

        What is more conducive to social cohesion than your next-door neighbour paying 10% of the rent you do because their granny used to live there, eh?

  3. DubLoony

    The amount of residents objecting to any build of anything around the city is disgraceful. the level of disconnect between older generation vs young who need a place to live is shocking.

    If anyone is banking on downsizers, if you have lived in a house for 60 years, you’re not going to take to apartment living at this stage of your life. Especially not poky little ones we have here.

      1. ahjayzis

        Can’t take the second part of that for granted though.

        We need serious beefing up of apartment and housing spatial standards before you can reasonably expect residents to take it on trust. We’re worlds away from continental standards of apartment living and block design – that needs to be fixed as a prerequisite to less NIMBYism!

  4. Boy M5

    The only people who make excuses for rack renting are the rack renters and those who profit from it.

  5. Termagant

    Dublin’s not even that good

    If Galway had an international airport I’d be there in a hot minute

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