The slogan ‘Better Life Made Simple’ reads on billboards around the school yard – a near-complete block of apartments on North Circular Road in Dublin.
Anyone’s guess as to how much apartments will actually rent, but for an educated person, you can always consult the latest Daft.ie report published last Tuesday – though so far, its estimates may be on the conservative side.
In the capital, according to a Daft report, the average for two beds per month is €2,119, a 10 percent increase at this time compared to last year. You can certainly pay much more in Dublin city centre, such as in the new Quayside Quarter development on the North Wall where €3,320 per month is being sought for a two-bed.
Or, if you have enough pockets to live in Spencer Dock, a luxury two-bed penthouse will set you back €4,250 a month, which is more than the monthly repayment on a €1m mortgage. A really better life – and very, very expensive.
All in all, the latest crunching of its own numbers by Daft.ie caused a dire situation for renters across the country.
A three-bed house in Galway City averages in the region of €1,440 – an increase of about 12pc from this time last year. Five-bedroom homes in Limerick have seen an increase of over 30 percent over the past 12 months.
The most alarming number in the report, however, was not the prices, but the total figure of 815 properties currently listed on the portal across the country, down 70 per cent from a year ago.
Essentially, when Daft.ie published statistics for these titles last week, the stories of extreme dysfunction in the rental market were thick and fast.
Letting agents get on the radio recently talking about receiving about 90 applications within three seconds of posting rental properties.
35-year-old working men living with their parents made headlines again – but this time, instead of complaining about not being able to buy a house, they were lamenting their inability to rent.
Things can get worse before they get better.
According to Marion Finnegan, an economist and managing director at Sherry Fitzgerald, demand could still move upwards.
“I think we’re probably getting to the point we were at just before the pandemic,” she said.
“With Covid, people went home, but as companies fully reopened, and everyone has to stay at their place five days a week, there just isn’t enough housing. It’s going to be a big issue for the competition.”
So as adult males and females return to the nest in increasing numbers, have the delinquent socioeconomic offspring of years of government housing policy also come home to settle?
“You need to look at 30 years ago, when the government decided to strategically withdraw from the direct building of social housing, and instead start putting people in the rental sector and supplementing them with rents instead,” Lorcan Sir, a senior lecturer, said. and specialist in housing policy at TU Dublin.
“Previously, hiring was just for students, temporary workers, immigrants, and perhaps different people – a temporary space to accommodate yourself as you move from one job, or career, or stage in life to another. gone.”
Meanwhile the need for social housing has increased significantly, according to Dr. Rory Hearn, assistant professor in social policy at NUI Menuth.
“The state is paying landlords one billion euros a year in rent and this has put enormous pressure on the housing market,” he said.
“I’ve been arguing for six years that this was supposed to happen, and it is happening now. The state’s completely skewed view of social housing policy is at the heart of this. He essentially said: ‘We are now social. Don’t want to build housing.’
“Go back to 2011, when Willie Penrose of the Labor Party [and then housing minister] Said that the state is no longer going to build large social housing estates, but will rapidly acquire them through the private rental system. Now you have this basically perfect storm. People are stuck, because when the state is getting its social housing from the private sector, they cannot buy. ,
Sirr argues that the basic function of the rental sector has changed radically. He said there is a new group of people all used to the private rental sector as well who would have generally moved into social housing. But because the councils no longer had any social housing, people were instead housed in private rented areas.
“Between 2006 and 2011, the number of private homes on rent doubled. Some of them were immigrants who did not buy homes until they settled down or found themselves on their feet. Some of these were people who were trapped in the rental market during the accident.
“But the rental sector is stalled – we don’t know what it’s going to be in the next census, but it’s likely to be above 20 percent of private homes. This is a level we’ve probably seen since the 1950s. Haven’t seen it since.”
The transfer of social housing to private rentals, he said, took place in about 59,000 homes for rent, compared to council homes back in the day.
This puts enormous pressure on the rental stock, as the state effectively competes with its own citizens for the purchase of rental properties.
According to research by the Residential Tenancy Board in 2021, about 20 percent of tenants in the private rental sector receive rent assistance.
Meanwhile, he said, the state’s participation in buying new housing has grown from about 10 pc to about 25 pc in five years – squeezing the market for first-time buyers and putting more of them in rented housing.
“Five years ago, in 2017, half of all new homes would hit the market. It has come down to around 27pc or 28pc. Last year, we constructed 21,000 houses – but less than 6,000 houses came on the market,” he said.
Add to the mix the exodus of small private landlords from the market, and you get something that approaches a near death spiral.
“If you go back to Celtic Tiger there was a heavy focus on investor activity in the market, but then the other extreme happened,” Finnegan said.
“After the accident, we saw a significant exit of investors from the market – and this has been consistent.
“Every year we could see that the level of investor buying was negligible, down to low single figures in percentage terms and only slowly returning to about 10 pc.”
Since then, Finnegan said, it was hoped that institutional investors would solve the problem of lack of investors by replacing small landlords with professionals.
His concern is that, being a sparsely populated country, that can only work for areas such as Dublin and Cork and some other regional urban centres.
“Ultimately, we need policymakers to prevent investors from leaving the market, and encourage more people to come back.
“I know it is very politically sensitive. There is a perception of landlords being this wealthy group of people. But in reality some people are casual landlords.
“They bought an apartment, the market fell, they occupied it, and as their families grew, they moved into a house. But they are a significant force in the property market.”
Finnegan argues that taxes should be lowered to encourage private investors. This, she said, is not the case at present.
“If you give unrealistically low returns for private landlords, they are not encouraged to invest in your property and the result is poor quality housing.”
Sirr agrees that we need to reform the tax treatment of small landlords, so that they are treated as personal income, rather than rent, as it is now.
“We are losing a lot of them,” he said. “And we need a functional rental area.”
Meanwhile, Hearn believes there is another way to take the pressure off the rental sector.
“Most of the renters do not want to rent in the private sector. They either want to live in permanent social housing, or want a home of their own.
“The solution is that the state has to build affordable housing on a large scale for people to buy, and also make them social housing. We need a state construction and development company to build on the vast public land we have.
“The state could have done it if it wanted to – but I think ideology is stopping it.”
In the meantime, it seems the only way out is for rental prices.
Case study: ‘Next week we’ll be homeless if we can’t find a place to rent’
Aga Novak sits in her rented accommodation surrounded by packed boxes. “I’m so sorry,” she said tearfully. “It’s such a tough time.”
Originally from Poland and now living in Dublin 18, the mother of two received a notice from her landlord in November to vacate the property to make way for the sale.
After a six-month search, she and her husband are now one of 20,000 people pursuing less than 1,000 homes in Ireland.
“When our landlord gave us a notice, I asked if we could stay till June, when the kids would finish school, but he didn’t give us time.
“She needs to sell and is entitled to do so – this is her house – but it has been very stressful.
“I’ve tried about 45 properties and only got four back,” Ms. Nowak said.
“I started a job at a post last May and I was looking forward to a six-month probationary period so that I could secure a mortgage, but it’s impossible to find anywhere for five people with a property price, because my Mother lives with us too.
“We have about €2,300 for a month’s rent. I would still like to save up for a mortgage but when I look at the prices it scares me because there is no chance to rent and save.
“It’s so hard because the kids can see me packing, and they’re like, ‘Mom, where are we going next week?’ There’s only one week left and I have to tell them, ‘I don’t know’.
“Yesterday when I got a message from another agency to inform that we have not got the house, I lost all hope. And today another call made me very angry.
“A landlord asked me what age my children are and what school they attend. How is it relevant if I can pay?
“I don’t tell them my mom is staying with us because I know they won’t rent us a two-bed, and she’s the only one I’m able to afford, because that too €2,300-€2,500 Is around. I can’t dream of renting a three-bed one.
“This morning I saw my daughter packing the boxes and she told me she was fine but she was very calm.
“I know I’ll have a better chance of getting a council house if I go to emergency housing, but I don’t want that and it’s not worth it for the effect it has on my kids.
“I don’t want anything free, I want to pay mine but there’s so little.”