Dublin property and rental prices have been sharply rising over the past few years, Martin Healy analyses the situation before the new government comes into power.
It’s hard to avoid news of the skyrocketing rents in Dublin. The city is now seeing rents that are 0.4 per cent higher than the peak of the property bubble in 2007. Whilst the rest of the country sees rents around 14.5 per cent lower than the peak in a number of areas, the sheer scale of the increase in Dublin rent is a terrifying prospect for anyone in the Dublin area.
The damage these prices are doing have already affected the UCD campus – UCD accommodation services prioritised first year and international students at the start of this academic year. Students from around the country, and around the world, are looking to study in Dublin, but the market is unsustainable outside of the lucky few, with increases in rent hitting nine per cent in Dublin last year. The average rent for a house in Dublin now stands at €1,431 per month.
Most of this comes from the property bubble and subsequent crash. Due to the complete halt in the Irish construction industry in 2008, few properties were being built either in Dublin or elsewhere. According to the 2011 Census, the Dublin area population grew by 83,427 to 1,270,063 in the five years since 2006. With another Census due for next month, this number has likely increased yet again to over 1.3 million.
As the population – whether it be students, or families in any part of the city – continues to grow, the absence of construction is only going to push property and rent prices even higher. Dublin property prices fell by a 1.2 per cent in January, but they have still increased by 3.4 per cent since January 2015. As prices continue to climb, landlords and residential property owners are happy to keep letting prices increase. It’s the classic economic supply and demand situation: there are significantly more people looking to rent than properties available.
The pressing need to get apartments and homes built is urgent in the city, but there has to be a certain level of quality, in case of something like the Priory Hall fiasco happening again.”
The effect of these climbing prices is evident in the events at Tyrellstown. Protests broke out in earnest last week as around forty tenants are being evicted due to their loans being sold and their leases cancelled. So many families like those affected in Tyrellstown are feeling the same effect; property prices keep climbing, so people have turned toward renting houses.
The security of these leases have been proven to be significantly less than that of a mortgage. These families will be forced to move further away from the city and out of Dublin 15, as many cannot afford the constantly climbing prices. While the narrative is that the country is slowly recovering, for many, the era of austerity is definitely not over.
It is crucial for the incoming government to deal with this situation correctly over the coming months and years. The pressing need to get apartments and homes built is urgent in the city, but there has to be a certain level of quality, in case of something like the Priory Hall fiasco happening again. A shift to a European-style renting economy is already entering into Irish life. Dublin citizens just need the kind of long-term apartment buildings that are seen throughout cities all over the continent.
Recent signs have not been entirely positive. Late last year, new regulations came from the Department for the Environment and Minister Alan Kelly regarding the new minimum apartment size in Dublin. The new 40 square metre apartments would be 27 per cent smaller than the current minimum size. It allows developers to fit as many apartments into the city as possible, in order to curb the supply issue.
The plan has drawn a lot of fire towards the incumbent minister. The Royal Institute of the Architects of Ireland (RIAI) vice-president John Mahoney has stated that the new minimum sizes would not be possible due to the constraints on the smallest permissible room sizes. He cites that the actual “practical” minimum for a one-bedroom apartment is 49 square metres at least.
This supposed solution by Kelly and the department is incredibly unlikely to settle things long-term. While apartments and new homes are desperately needed throughout the city, even just to alleviate rent prices, this supposed plan would be short-sighted. Continental European apartment living is designed with the long-term in mind. These apartments are family homes, with the facilities and space one would need to live in an apartment over a period of decades.
Kelly’s plan concerns first-time buyers and young people without children, with no eye toward creating apartments for long-term, fixed living. And while he states that “these are very good standards”, larger and more suitable apartments that are costlier to build would provide an actual long-term strategy. At least they would ease the hike in prices as well as make use of the limited space in the Dublin city area.
The rate at which rent is increasing in Dublin is slowly easing up, but the rates are already at such a high. The issue affects so many in the city, from the students here in UCD, to the tens of thousands of people on social housing lists. In January, according to the Dublin Region Homeless Executive, 134 families became homeless in the city – which is the highest the figures have ever been on record. This takes the figure of families living in temporary emergency accommodation up to 769. A new Focus Ireland report from last week wants the new government to commit to construction of over 40,000 social homes over the next five years.
Whatever steps that have to be taken, the new government needs to put their best foot forward in order to handle this situation. With the property boom of the Celtic Tiger in the rear-view, the Irish government, as well as its citizens, know the consequences of freely allowing developers to construct as many (widely fluctuating in quality) homes in any part of the country as long as the money kept coming. If Ireland’s “recovery” is to be as such, crucial issues like this are not an area to be squandered, especially for those who want to live in Dublin long-term after their time in UCD comes to an end.