Average rents in Offaly on the increase again
AVERAGE rents in Offaly in the last quarter of 2020 were 6.6 per cent higher than the same period in the previous year despite the Covid-19 pandemic.
The average listed rent in the county is now €978, a massive increase of 85pc from its lowest point, according to the latest Daft.ie Rental report for the last three months of 2020.
Rents in Leinster's midland counties rose 4.6pc year-on-year, reflecting a sharp fall in availability - just 55 homes were available to rent on February 1, down two thirds compared to a year ago.
The report breaks prices down into accommodation and notes the average rent for a one-bed apartment in the county was €719, up almost 8pc on the previous year.
Rents for a two-bed house stood at €805 while a three-bed house would fetch an average rent of €920, both higher figures than in the same period in 2019.
Rents for a four-bed and five-bed house stood at €1,048 and 1,179, also higher than in 2019.
Average rents in Offaly were lower than in neighbouring Westmeath and Laois but higher than Tipperary.
The average rent nationwide in the final three months of 2020 was 0.9pc higher than a year previously while the average monthly rent stood at €1,414 in the final quarter of 2020, up from a low of €742 per month seen in late 2011.
The national average hides significant regional variation, though. In Dublin, rents fell 3.3pc during the year 2020, with rent declines concentrated in the second and fourth quarters of the year.
In the rest of the country, however, rents rose by 5.4pc on average during 2020, with only a modest fall in the second quarter lockdown and an increase during the final three months of the year.
In Limerick city, rents were almost 4pc higher year-on-year, while in Cork and Galway cities the increase was just under 5pc. In Waterford city, rents rose by 5.6pc - the same rate of increase as in the rest of the country.The different trends in rents reflect changes in the availability of rental homes. In Dublin, there were 2,600 homes available to rent on February 1st, up from fewer than 1,600 on the same date in 2020.
In the rest of the country, however, the number of homes available to rent has fallen sharply – from almost 2,000 on 1st February 2020 to just 1,139 a year later.
Commenting on the report, Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said: “Often people query whether the basics of supply and demand apply to the housing market. These latest figures should remove any lingering doubts about the importance of supply in lower rents. Outside Dublin, Covid-19 has led to a further worsening of supply conditions in the rental market, with the number of homes coming on each month down 17% on already low levels. While demand for rental homes outside the capital has fallen – with the rise in unemployment – it has not fallen as much as supply, pushing rents further upwards.
“In Dublin, Covid-19 has had the opposite effect, with the number of homes being advertised to rent up 64% on February 1st, compared to a year previously. With the increase in homes being advertised, active demand for homes to rent has also soared, up 40% compared to pre-pandemic. But the greater liquidity of the market has helped bring rents down slightly. Nonetheless, rents in the capital – and in Ireland’s other main cities – remain at twice their level a decade ago. The underscores the importance of ensuring the construction of tens of thousands of new rental homes over coming years, to help bring rents back down to affordable levels.”
Reacting to the report, the Institute of Professional Auctioneers & Valuers, said it is notable just how much more expensive it continues to be to rent a home rather than buy one.
Pat Davitt, IPAV Chief Executive said the report highlights that even forecasting for a 2pc rise in interest rates, something that is unlikely in the foreseeable future, servicing a mortgage is still substantially cheaper in most areas of the country - provided one can qualify for a mortgage.
For 3-bedroom homes the latest Daft.ie report shows that in Meath, a mortgage even with a 2pc interest rate increase would be €888 a month, while rent is currently €1,293. In Louth the equivalent figures are €798 and €1,214: Kilkenny €753 and €965; Clare €605 and €836; Donegal €460 and €632; Dublin 22 €1,249 and €1,762.
“This highlights just how malfunctional the property market remains. Those on average wages, with an ability to repay a mortgage are stymied by the severity of the Central Bank mortgage rules,” he said.
“There are would-be first-time buyers who have been unable to acquire a first mortgage because of the fallout from the last financial crisis and are now in their late thirties and forties. The situation is going to have a negative impact on their financial wellbeing into the future, it is likely to mean poverty for many in later life,” he warned.
Mr Davitt said the Central Bank mortgage rules are just too severe for this cohort of the population who cannot achieve the aspiration of owning a home, while public policy forces them to pay substantially more in rent. He called on the Government to set up, without delay, the promised Commission on Housing.
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