A report this week from property website daft.ie showed that average rents across the State increased 12.4 per cent to €1,304 in the year to June.
Representing the ninth consecutive quarter in which a new all-time high was set, the figures make for grim reading on the state of the Republic’s rental market.
More importantly, however, they clearly demonstrate the extent to which the Government’s rental cap regime across “rent pressure zones” has failed.
In 2016 then minister for housing Simon Coveney introduced these rent pressure zones with the aim of moderating widespread increases in rents. Dublin, areas in Meath, Wicklow, Kildare, Cork and Galway were all on the list. Coveney's successor, Eoghan Murphy, made further additions.
Across the entirety of Dublin, rents should not have risen by 13.4 per cent if the controls were working.
While one would expect rents to exceed 4 per cent based on the current market and the fact that new properties don’t immediately fall under the regime, rents simply shouldn’t be running at as high a rate as they are.
Loopholes
The failure in the system is because of its loopholes – allowing properties that have undergone a “substantial change” to be exempted as well as those that haven’t been let at any time in the previous two years.
The majority of private landlords are decent people and very often a small cohort spoil the party for the many.
But when it’s so easy to get around the rules, simply by doing up a bathroom and potentially leaving a property idle for a month to achieve the appearance of “substantial change”, how can this scheme be expected to work?
Outside Dublin, in areas subject to the cap, the scheme has recorded equally poor results. In Cork city, rents rose 12.8 per cent. Galway city recorded a rise of 15.9 per cent while Wicklow recorded an increase of 11.9 per cent.
If the Government had missed these targets in relation to the health service, they’d be justifiably lambasted left and right.
This is a failure of gargantuan proportions, and it needs to be righted before long. Otherwise, we can expect to see more of these pages filled with stories of homelessness and evictions.
