“We’ve never seen rental increases like this in any jurisdiction that we’re aware of”
David Ehrlich (above) chief executive of Ires Reit, Ireland’s largest biggest (tax exempt) landlord.
First Time Buyer writes:
The latest CSO figures put the annual increase in residential property prices at 7.3%.
Moreover, average rents nationwide haves risen by around 12% over the past year, which is the highest rate of annual inflation on record.
Are the two linked? Absolutely!
Dr John McCartney, director of research at Savills, commented that
“the Central Bank rules prevented some people from buying and caused a temporary slowdown in the market. But the frustrated buyers were simply pushed into renting, which has driven up rents. What we are now seeing is a resumption of price growth as investors are being attracted into the market by ever higher rents.”
These increases are not only having a disastrous effect on communities, they are severely damaging our Irish competitiveness at a time that when we need it most.
But rather than address the problem, the Government have chosen to FAN THE FLAMES. Their “Help to Buy” scheme made Davy economists revise UP their growth forecast for house price inflation to 7% and at the same time gained praise from Tom Parlon of the Construction Industry Federation.
Now Minister Simon Convey has signaled that rent controls will not be introduced because he doesn’t want to “put the dead hand of regulation on the construction sector”.
Unfortunately, Simon has missed a trick, because as we know investors love CERTAINITY as they can easily model out their expected return.
Whereas if rents are expected to jump more than 10% a year, they will build this into their bid price; further increasing land and property prices and contributing to the problem.
The government needs to ACT NOW and introduce rent regulation and security of tenure and stop pandering to global wealth funds and the construction sector at the cost to Irish society.