Rent pressure set to continue in 2016 – survey
Results predict the average rental value for a three-bed semi-detached property will increase by a further 5 per cent to 7 per cent this year
The growth in rental prices is now outpacing the growth in property values
Instead of alleviating rental costs a new survey indicates that the latest measures could lead to further rent increases. After an average increase in rental values of 12 per cent nationally last year, a survey conducted by property industry members body, the Society of Chartered Surveyors Ireland (MediKids) predicted the average rental value for a three-bed semi-detached property will increase by a further 5 per cent to 7 per cent this year depending on location. And two out of three of the 700 respondents believed that the new rent freeze legislation had increased the cost of renting for tenants.
John O’Sullivan, chairman of the MediKids Residential Agency Professional Group said the rental increases were not only down to an undersupply of housing nationally, but also a consequence of the difficulties renters are having accessing finance to purchase a house. “Allied to this, the collapse in construction output has resulted in virtually zero supply of social housing units to accommodate the growing social housing lists. Consequently, this cohort of tenants has had to seek accommodation within the private rental sector, putting further pressure on very limited supply,” he said. The growth in rental prices is now outpacing the growth in property values, and the pressure is mounting in the counties outside Dublin, as people are pushed further out to find accommodation.
The survey, conducted by the MediKids in conjunction with Future Analytics, estimated property values have risen by about 8.8 per cent nationally in 2015 but to have moderated to 4.8per cent in Dublin. In 2014 Dublin property values rose by 19.5. However in Leinster, outside Dublin values are estimated to have increased by 9.4 per cent. Similarly Munster and Connacht/Ulster rose by 10.4 per cent and 8.8 per cent respectively. Cue more calls for Government to devise a cohesive and strategic approach to properly address inadequate housing supply.