Rent in Ireland have increased by an average of 82% since 2010, compared to the EU average of 18%, Banking & Payments Federation Ireland (BPFI) has said.
It is the third highest such increase among EU countries in that time, with the average rent risen to around €1,700 in the third quarter of 2022 from a low of €765 in late 2011, according to Daft.ie.
In terms of house prices, the increase was nearly 50% in the EU from 2010 to Q2 2022, with average prices increasing by over 55% in Ireland.
The BPFI's latest housing market monitor further warned that resilient high demand for housing will ensure that prices will continue to rise until supply increases substantially.
Population growth, considerable pent-up demand and the considerable gap between average rent and mortgage payments mean that house price pressures will remain until there is sufficient supply available.
In Association with
House prices nationally rose by an average of 10.8% in the 12 months to September, with annual inflation in the price of residential property falling from a high of 15.1% in March as prices surged following the reopening of the economy post-Covid.
Brian Hayes, CEO of the BPFI, said that reduced purchasing power among households caused by higher living costs and general economic uncertainty will affect mortgage demand, but that prices would remain elevated in the medium and long term.
"With residential property price inflation having decelerated further in Q3 2022 we know that in the short term the fall in the purchasing power of households, caused by higher housing and general living costs as well as the future uncertainty in the wider economy, are likely to affect mortgage demand," Hayes said.
"However, as our latest Monitor shows today, looking to the medium and longer term, the significant gap which now exists between average rents and mortgage payments coupled with significant latent demand are likely to balance any negative impact on demand for mortgage lending in the short term which will likely continue to impact house prices unless we see a substantial increase in supply.
"For example, the average first time buyer monthly mortgage payment was just over €1,000 during the first half of 2021 compared with the average monthly rent of over €1,400 at the national level, with the gap being significantly higher in Dublin.”
The report also found despite a "significant increase" in new housing entering the market this year, population growth continues to outstrip supply and figures for the commencement of new builds are declining.
"Commencement figures of new housing in the first nine months of 2022 were 5.4% higher than in the same period of 2019," Hayes said.
"However, we see that the commencement activity seems to be declining on an annual rolling basis after peaking at 35,000 units during the first quarter of 2022 to some 26,600 units in October 2022.
"Meanwhile, in terms of population growth, the latest Census figures from the CSO show that, between 2016 and 2022, the housing stock increased by over 120,000 whereas population growth during the same period was over 360,000.
"More significantly, between 2011 and 2022, the population in Ireland increased by over half a million people whereas housing output grew by only 130,000 units.”
(Pic: Getty Images)
