Charity: Rental market ‘spiralling out of control’
While the Government has taken some action by introducing rent pressure zones to try and ease rising rents, it is still unclear if this will be enough or have any real impact.
That’s the view of homeless charity Focus Ireland, responding to a rental report which revealed this week that rents rose nationwide by an average of 13.5 per cent in the year to December 2016.
This is the largest annual increase in rents ever recorded in the Daft.ie report, which extends back to 2002. In addition, at €1,111 in the final three months of the year, the average monthly rent nationwide is at a new high, for the third quarter in-a-row.
Rents rose by 12 per cent in Cork city and now stand at an average of €1,096. In the rest of Cork, rents were on average, 12.9 per cent higher in the final three months of 2016 than a year previously.
The average advertised rent is now €795, up 36 per cent from its lowest point.
Rent pressure zones are areas where rents are above average national rent level and legisaltion provides that annual rent increases in rent pressure zones will be limited to four per cent.
It was first introduced in Dublin and Cork city in December and was extended to other areas in January including Ballincollig, Carrigaline, Douglas and Passage West.
Focus Ireland Director of Advocacy Mike Allen said: “This is the largest annual increase in rents ever recorded in the Daft.ie report and shows the rental market was spiralling out of control right up until the time that rent controls were introduced.
“This is the clearest indication possible that the Government action on rent control was long overdue and that leaving things to market forces would have resulted in more misery for tens of thousands of people.”
Ronan Lyons, economist and author of the Daft report, said the latest figures from the rental market remain very concerning. While measures to control rental inflation may help sitting tenants, he said, they do little to address the underlying issue of a lack of supply.
He said: “Indeed, they may hinder supply, by encouraging the exit of existing landlords who had not substantially increased rents in recent years. Addressing construction costs remains the best way of addressing supply shortages and the audit of build costs remains the single most important next step for policymakers, for that reason.”
CARRIGALINE STILL DIVIDED
The Government has no plans to fix the “absurd and totally artificial” division of Carrigaline. This has resulted in rent limits applying to one side of the town and not the other, according to Fianna Fáil TD Michael McGrath.
Deputy McGrath was commenting following a parliamentary reply he received from Minister Coveney.
“Arising from the fact that Carrigaline is split across two different local electoral areas, we now have the ridiculous situation whereby the area of the town north of the Owenabue River (situated in the Carrigaline – Ballincollig local electoral area) is subject to four per cent rent increase per annum whereas the area of the town south of the Owenabue River (situated in the Kinsale – Bandon electoral area) is not subject to the new rules.
“This is completely unfair and places tenants on one side of Carrigaline in a vulnerable situation,” he said.
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