National rent prices jumped 1.2% in the last year despite impact of Covid-19

National rent prices jumped 1.2% in the last year despite impact of Covid-19
Conor Fitzpatrick

National rent prices jumped 1.2% in the last year despite impact of Covid-19

The latest Daft.ie report shows that the industry has ‘bounced back’ from Covid-19.

THE AVERAGE NATIONAL rent price has continued to rise year-on-year, despite the impact of Covid-19 on the rental market for much of 2020.

New statistics published by property website Daft.ie show that rents across the country rose by an average of 1.2% in the year to the end of July.

The average price of rent in Ireland now stands at €1,412 per month.

Dublin continues to see the most expensive rents in Ireland, with the average cost of rent €2,030 per month, a marginal increase of 0.2% compared with July last year.

The rest of Leinster saw the highest year-on-year rise, with a 3.3% increase from July 2019, bringing the average monthly cost of rent in the region to €1,219 last month.

Munster saw a 2.7% rise in the year to July, when average rents reached €1,069 per month. Only Connacht-Ulster saw a year-on-year decrease, with a 0.6% fall to the end of July bringing the average cost of rent in the two provinces to €862 per month.

The report also analysed house prices across the country over the course of the last 12 months, showing that the average cost of buying a property in July was €259,733, unchanged compared with last year.

The average cost of buying a home rose by 1.2% in Dublin to €378,881 and by 2.1% in Leinster to €240,852 in July.

However, average prices fell by 2.8% annually in Munster to €212,382 and in Connacht-Ulster by 2.5% annually to €176,827.

Economist at Trinity College Dublin and author of the report Ronan Lyons explained that Covid-19 policy supports for owner-occupiers and tenants appeared to be behind the lack of drop in house and rent prices.

But he suggested that this could change in the future.

 

 

“Given the potential for successive waves of Covid-19 in Ireland, this may be tested in the coming quarters,” he said.

 

“As it stands, both sale and rental segments appear to have weathered the initial impact of the pandemic and the underlying shortage – especially of rental accommodation – remains.”

 

Raychel O’Connell, Communications Manager at Daft.ie, Raychel O’Connell, said the industry had “bounced back” following price drops in April.

 

“Despite the rising prices in sales and the significant increase of supply in rental, demand for properties in Ireland is as strong as ever,” she added.

 

Commenting on the report, Sinn Féin housing spokesperson Eoin Ó Broin said that both rental and buying costs remained too high and that affordable supply was still too low.

 

“The government cannot afford to wait and see what the private market will deliver,” he said.

 

“Budget 2021 provides the government with an opportunity to take decisive action and dramatically increase capital spending the delivery of social and affordable homes on public land.”

 

If you are thinking of investing in property as a source of alternative income, 

why not contact us today to discuss your requirements in more detail?

Phone: +353 86 325 0048 I Email:info@spirecapital.ie

Source: The Journal – Stephen McDermott

  • Covid-19

    Pandemic set to cause major shortfall in housing supply, warns new study

    Pandemic set to cause major shortfall in housing supply, warns new study The study from the Banking & Payments Federation Ireland shows that new builds have been badly impacted   THE COVID-19 CRISIS has had a major impact on housing supply, according to a new report.   The weeks-long hiatus on construction work as sites shut in response to the pandemic, combined with the limits imposed by social distancing requirements, mean that new houses might only reach 14,000 in 2020 – a major shortfall.   The figures come from a study by the Banking & Payments Federation, which was published this morning.   Construction work returned several weeks ago in Phase One – but with social distancing rules in place and strict new regulations.   Dr Ali Ugur, Chief Economist at the federation, said: “Ireland’s housing supply is going to take a significant hit this year given that the construction sector stopped all activity between the end of March and mid-May as well as the fact that current activity is very much limited due to work practice restrictions as part of Covid-19 health measures.”   He estimates that before the crisis the number of new houses built would have been between 24,000 and 26,000.   However, the impact of the coronavirus pandemic means that new builds will likely be between 14,000 and 16,500 this year.   Demand The study suggests that demand for houses and mortgages might prove resilient even in the face of the economic shock from the pandemic.    Ugur said that it “may hold up better due to the important role which income levels play in housing and mortgage demand”.    Those on higher incomes, according to the study, were less likely to need the Pandemic Unemployment Payment or be on the Temporary Wage Subsidy scheme.    This meant that many of those who could afford to buy a house were least affected by the pandemic.    “Looking at these figures in the context of the mortgage market, it is earners in this same income bracket that account for the majority of those drawing down mortgages,” Ugur said.    “Given the significant and increasing share of first-time buyers in the Irish mortgage market, and income levels required to secure a mortgage, income losses during the pandemic may not have a significant effect on demand for mortgages from this cohort,” he said.    This means that the demand for new houses might be less likely to collapse in the months to come.    However, this doesn’t mean demand is unlikely to be affected at all. The full economic impact of the pandemic will still be borne out in the months to come.   The extent of Ireland’s recovery, Ugur said, will also play a role in housing demand.    Earlier this month, it was announced that Ireland Budget deficit hit €6.1 billion in May as spending on health and income supports added pressure on government finances.   If you are thinking of investing in property as a source of alternative income, ​ why not contact us today to discuss your requirements in more detail?​ ​ Phone: +353 86 325 0048 I Email:info@spirecapital.ie Source: The Journal -  Dominic McGrath
    Author: Conor Fitzpatrick
    Read Time: 6 min