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The 'last pressure valve' in the housing market is about to blow - and students will suffer

People looking for rental properties in all Ireland’s major cities are in for a rude shock.

A shared room in Dublin 1 going for €275 per month.
A shared room in Dublin 1 going for €275 per month.
Image: Daft.ie

STUDENTS LOOKING FOR accommodation close to universities in Ireland’s major cities are in for a rude shock over the coming months.

A severe shortage of available properties has driven up the prices for both homes and shared accommodation to rent, with the going rate for single beds in some areas jumping nearly one quarter in the past 12 months.

The latest Daft.ie rental report, for the second quarter of 2015, found the average price for a double bed in Dublin city centre had hit €638 – up over 11% on a year prior.

Prices for single and double rooms across other parts of the city also rose around 10%, while in Limerick city the average rate for a single bed leapt over 24% in the past 12 months.

Waterford was the only place where the cost of a room rental dropped during the period, with a double in the city costing an average €276, about 9% less than in 2014.

Daft1 Source: Daft.ie

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The report’s author, economist Ronan Lyons, told TheJournal.ie that shared properties were “the last pressure valve in the housing market” and when those prices jumped many students would either be forced to live at home or into long commutes from outside the major cities.

“Students are always going to suffer a bit more because they don’t have high incomes,” he said.

A lot of students have to go off by themselves and find a room; they’re going to find that it’s roughly 10% more in most parts of the country than it was a year ago.”

RL Economist Ronan Lyons at TheJournal.ie's offices earlier this year

UCD Students’ Union president Marcus O’Halloran said specific accommodation solutions for students needed to be plotted out.

Even if rent is tied to inflation or capped, the underlying housing shortage means that students will still be pushed out of the market,” he said.

90389956 Members of Ógra Fianna Fáil protest about the student housing crisis last week Source: Leah Farrell/RollingNews.ie

A pattern shift

Meanwhile there was a similar story of major price rises for whole apartments and homes to rent in most cities, as well as the commuter counties around Dublin.

However Lyons said the pattern had shifted from rapid price rises in the capital fuelling growth to increases in other cities driving the national average up.

“It is the first time that has happened in the current market cycle (since the financial crisis),” he said.

Now Dublin is dragging down the national trend. Not that the Dublin situation is necessarily getting any better, it just looks like we’ve reached a point where people can no longer pay more.”

The increase in rents in Dublin was 8.5% over the past 12 months, compared to a  national inflation rate of 8.6%. Prices had gone up 15% in the capital between 2013 and 2014.

Daft2 Source: Daft.ie

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Here are the average prices and inflation figures for Ireland’s biggest cities:

Dublin, average rent: €1,368

Year-on-year change: +8.5%

Cork, average: €889

Change: 10.4%

Galway, average: €818

Change: 10.1%

Limerick, average: €718

Change: 8.9%

Waterford, average: €629

Change: 8.2%

Daft3 Source: Daft.ie

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Across the country, there were only 4,600 properties listed as available to rent at the start of August, compared to 6,800 a year earlier and more than 23,000 for the same month in 2009.

However the number of properties on offer was slightly up on the 4,340 listed in May, when the rental squeeze hit its worst point in a decade.

Note: Journal Media Ltd has shareholders in common with Daft.ie publisher Distilled Media Group.

READ: Four charts that show how Irish students are feeling much more confident about Ireland >

READ: The next step: Charts show financial strain Irish parents face as their child goes to college >

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About the author:

Peter Bodkin  / Editor, Fora

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