The Irish property market appears to be spluttering back to life. Rents are up by 14 percent this year in the capital, with Galway and Cork showing year on year rental increases of 6 and 7 percent respectively. The sharp increase in rent is outpacing income levels and many people are finding that they just can’t find suitable accommodation within their budget. As a result homelessness levels have increased by 20 percent this year alone.
Today in the Dail Deputy Willy O’Dea and others voiced their concerns that rents around the country have now far surpassed the rent supplements available to those on low incomes. This has created a breeding ground for unscrupulous landlords taking tax-free, under the counter, unregulated payments from families desperate to keep their homes. Vulnerable home-seekers are hoarded into the arms of these landlords because many landlords quite simply refuse to take on tenants who are in receipt of governmental support.
Worryingly, at a time when the population of Dublin is increasing by around 10,000 inhabitants per year, the stock of available rental properties is at its lowest since 2006. There simply are not enough properties to keep up with demand. The Central Bank’s proposal to introduce a minimum 20% deposit requirement for mortgages looks set to compound the problem by ensuring that young professionals – those who would normally be taking those first steps onto the property ladder – will simply be priced out of the market altogether.
Currently there are around 90,000 people throughout the country who are on the waiting list for social housing. While plans are in place to address this by building new social units, it is quite evident even from the plans themselves that the building proposed is not sufficient to meet demand.
Despite calls on the government from homelessness charities to reign in private landlords and enforce upper limits on what can be charged for properties, NAMA, the state’s housing agency and property developer seems to be actively promoting its portfolio to foreign investors on the basis that rental prices are set to increase year on year for the foreseeable future. The investments that are being made in reliance upon these claims are significant – recently 716 Dublin apartments were purchased from outside the state – look set to lock in a hyper-competitive mentality in the rental market.
Many believe that rent control legislation would be the best way to build much-needed security into tenant’s rights, however the decision in the 1981 constitutional reference on the Housing (Private Rented Dwellings) Bill makes such legislation impossible without judicial intervention.
As Dublin excels on the international IT stage, making it an attractive city for the brightest minds of Europe, it is clear that insufficient supply of decent housing will eventually get in the way of its capacity to grow into an international powerhouse.
All the voices who are weighing into this debate have one message: the need for housing is now urgent. There are 1500 people living in emergency accommodation every night in Dublin alone. The planned Social Housing Strategy is clearly insufficient. What appears to be needed is real reform that deals with the issues from a human point of view.
Blog By Sarah Treacy
Image courtesy of Giuseppe Milo – Flickr License