Chapter 1: What are the recent trends in rental prices in Ireland?
First this morning, rents in Ireland are up 4.4% in just three months, the largest quarterly surge on record, bringing the average two-bedroom apartment rent per month to €2,176. This DAFT.ie data comes as the government's new rental system rolls out and follows figures released last week showing a 50% increase in eviction notices in the first three months of the year.
To discuss this, I'm joined now by Sinn Féin Housing Spokesman and TD for Dublin Midwest, Owen O'Brien, and by Fianna Fáil Cork South Central TD, Seamus McGrath. Good morning to you both. Seamus McGrath, we're going to come to you first. These seem like extraordinary figures. The biggest quarterly rent increase on record on top of that massive jump in evictions.
How much of this is directly linked to the government's new rent rules?
Yeah, good morning, David. Look, there's undoubtedly a linkage here. And I think part of that linkage is the fact that in the run up to the 1st of March and the new rules kicking in, undoubtedly landlords in some instances were holding onto properties so that they could release those properties after the 1st of March and reset the rent.
So we all heard that anecdotally, but I think the figures in the DAFT report certainly bear that out. And Rowan Alliance, the author, actually referred to that as an issue. So there was a slight increase in supply, and I have no doubt that came about because you had scenarios where tenancies became vacant voluntarily in terms of tenants leaving.
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Chapter 2: How are government policies affecting eviction rates?
Instead of renting out those properties immediately, landlords held off. So I think that's certainly a factor here. But on the bigger picture, look, as a government, we fully recognise the rental market is not functioning properly. It needs to be fixed. And the only way to do that is by increasing supply.
In any market, David, when you have a shortage of supply of a product or a service, prices will increase. We need to address that issue. We need to address the underlying issue, which is why as a government, we are using every tool at our disposal to increase the housing supply and the availability of rental properties. So there is undoubtedly a linkage in terms of the new rules that came in.
But it is important to point out that under the new tenancies, tenants have been given significant protection in terms of security of tenure. For example, they have a minimum of six years duration. And during that period, it's important to point out that rents cannot increase beyond the 2% per annum, for example.
So we are seeing a blip here in terms of the transition from the old system to the new system. And these figures are not comfort reading for renters. I fully accept that. And I think there is more the government can do to support renters directly in terms of the rent tax credit, for example, in terms of trying to address the eligibility for social housing so that people can get support there.
Yeah, but just to interject, so you accept that your own government's policies have contributed to this massive increase in rents. A lot of people out there are going to be suffering and they're going to say, if this was a foreseeable problem, why didn't the government foresee it and try and alleviate things for renters?
I accept there is a linkage. It's a temporary linkage. And it is because, as I say, landlords held off in renting out properties when they became vacant. What we undertook, David, was the most fundamental reform of the rental sector in decades. That was necessary. The government didn't just conjure this up.
It was based on information that came about from the Housing Commission, a report carried out by the housing agency. We had a dysfunctional rental market. We still have, and it's going to take time to fully repair that and fix that. But ultimately, we have to address the underlying issues here. and we can undertake short-term interventions which do not resolve the issue long-term.
We're only putting off further down the road today when we actually have a functioning rental market, when there is availability of properties and when they are affordable to tenants. And the report also highlights the fact that there are only 2,500 properties available, which is the core of the issue here.
There is a chronic shortage of supply and that is why the government is focused on increasing supply. So, for example, we have a record €9 billion being spent this year on trying to increase supply under the National Development Plan.
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Chapter 3: What link exists between new rent rules and rent increases?
one in three euros spent on capital investment will be in relation to housing so that we can increase enabling infrastructure in terms of wastewater treatment, in terms of transportation and so on.
Okay. I want to bring in Ono Bryn. Ono Bryn, this is a temporary blip.
What utter nonsense. This is exactly what the government intended to happen when they introduced the controversial rent hike bill. The purpose was for rents effectively to hit double digit numbers. We produced a very detailed analysis during the course of that legislation based on Residential Tenancies Board rent data showing that this would happen.
I think the only thing that government is probably thinking today is that the impact on rents is coming much quicker than they thought. If you think about this, a 4.4% quarterly increase in rents means if that trend continues, and it's likely to, you're looking at 18% over the course of the year. And that is already happening across a number of our cities.
Galway City, for example, according to the DAF.E report, rents up 18%. Cork City, where Seamus represents, up 13%. And the idea that this will somehow lead to an increase in supply is not credible. Even Ronan Lyons, who supports some of these measures, both in the Dart.ie report and in Morning Ireland, was raising questions as to whether it would indeed increase supply.
At the very best, it's going to lead to a small amount of very expensive supply in parts of Dublin and Cork. The rest of the country will be left behind, including Seamus's own constituency. And the only certainty is ever greater numbers of people will be paying thousands upon thousands of years extra in rent.
And those who will not be able to afford those rents, the thousands of people who've received eviction notices over the last nine months, they will be left either moving back home with their parents, forced to emigrate, or forced into emergency accommodation.
That is the deliberate decision of this government to punish renters for their failed policies over the last decade in the promise of maybe some supply, maybe in two, three, four, five years, if it comes at all.
But I think what Seamus was saying was that he anticipates that this is going to be a short-term effect because a lot of landlords, as we've seen through the eviction figures, have... created new tenancies by getting rid of existing tenants and jacked up the price, but that that won't continue into the next quarter?
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Chapter 4: How does the government plan to address the rental market issues?
I think that is clearly evidenced and the author references that in the report. But of course, we are trying to address the underlying issue in terms of supply, but also in terms of public housing, social housing and affordable housing. That is critical. We delivered a record number of social housing last year, over 9,000 newly built social houses.
The programme for government sets out a target of 72,000 over the lifetime of this government. We are putting record funding into housing. And as I say, issues such as the critical infrastructure bill, trying to fast-track infrastructure so that we can enable the further delivery of housing. These are the kind of permanent solutions we are trying to put in place, David.
We've heard a lot about government targets in recent years, Seamus, and the government has tended to miss those targets by quite a margin.
We also increased housing by 20% last year, which was a record increase in housing supply to over 36,000. That's still short of the target. If we can achieve similar levels this year, we are going to put ourselves well over the 40,000 mark so that we are working towards achieving the overall aim of the government. over the lifetime of this government. But it is all about increasing availability.
And as I say, the report highlights only 2,500 properties available. That is the issue. You are going to see increases until you address that issue. And that is something the opposition are failing to accept. They never refer to landlords. They never refer to the importance of having landlords in the market and trying to encourage and sustain landlords in the market.
We have increased the overall number of landlords in the market, and that's welcome. But the opposition focus on one side of the argument all the time, and they never address the root causes.
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Chapter 5: What protections do new tenancies offer to renters?
OK, I want to bring Owen O'Brien back in there. One of the things Sinn Féin has talked about is rent freeze and a ban on no-fault evictions. Some people would argue that that would drive smaller landlords in particular out of the market. What would you say to that?
Well, first of all, the government is already driving small landlords out of the market for over a decade. And one of the things I'll challenge, and Seamus' point, is that we are blue in the face setting out both immediate short-term emergency measures and longer-term structural reforms to address supply. Not just Sinn Féin, but the Housing Commission and the government keep ignoring those.
So what do we need from government right now to address this escalating crisis? One, we do need a ban on no-fault evictions for an emergency period where homeless services are overwhelmed. We do need a temporary ban on rent increases and for rents to be brought down.
But also crucial, government needs double investment in delivery of social and genuinely affordable homes to meet the need that's there. Government also needs to do far more to support small and medium-sized builder developers, build more work homes for working people to buy. Seamus will stand up for the Dáil week after week and demand government do more on social affordable housing.
You can't then come in here and say that's actually doing enough. They are not. And my big concern is, Fianna Fáil and Fine Gael have been in government together one way or another for over a decade. We keep hearing the same thing, that it's about supply, supply, supply. This government is not approaching this crisis with the scale of ambition. They're not introducing the level of investment.
They're not making the crucial reforms that we have set out, as have the Housing Commission, in great detail. All they are doing is saying to renters today, you are going to pay ever increasing rents because we failed to deliver sufficient volume of social, affordable and private for purchase homes over the last decade.
And for Seamus to say that this is a blip when all other independent commentators are telling you we are going to see a period of sustained rental increases at a faster rate than we've seen for a quarter of a century. And the consequences, just to repeat, are increased homelessness, increased immigration, increased return of adults to live with their families and friends.
And for people who can get these new rentals, they are going to be paying up to €5,000 extra in rent in a year. That's the reality in Galway today as a consequence of the legislation that Seamus and his colleagues voted for, knowing it was going to punish renters with ever-increasing rip-off rents without any meaningful increase in supply.
Let's bring Seamus back in there. The report highlights that we have 2,500 properties available, which is chronically short of where we need to be.
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Chapter 6: Why are current rental increases considered a temporary issue?
And what you're saying here this morning is we're going to somehow increase the availability of properties by imposing an eviction ban and a rent freeze on landlords. Can you please explain that? Because that is not something that stacks up. If the solution to this is supply, the short-term measures you are talking about will be detrimental over the medium-longer term, and it will actually...
impact on renters and tenants far more over the longer term because it will reduce the availability even further. When a temporary eviction ban was imposed during the COVID period, there was a spike in evictions when that was lifted afterwards. So I really would like you to explain how that is going to solve the problem.
See, the great mistake the government made when they had the temporary ban on no-fault evictions is they didn't use that breathing space to ramp up the investment in social, affordable and private for purchase homes. That is what we have been calling for for a decade. And the idea that somehow Fianna Fáil and Fine Gael's policy...
is increasing investment in the market, small and medium-sized landlords have been leaving for a decade. That is why we have record levels of evictions. In fact, according to the Residential Tenancies Board, last year there were fewer new tenancies registered than in the year before.
Are you ignoring the fact that there were 9,000 social houses built last year?
Newly built social houses, 9,000. Absolutely not. And you missed your target again. And we actually need 15,000 to 17,000 new-build social homes just to meet the demand that's there. So if you keep under-investing, if you keep missing targets, if you keep badly regulating, this crisis, which your party's created over the last decade, is going to get worse.
And the question I would ask you is, in your own constituency, Seamus, where there is not going to be any institutional investment... in expensive apartments. What are you going to say to the renters who you're telling today they're going to have to suck up increased rents when they're not going to get increased supply over the coming number of years? This policy has failed for the last decade.
It's going to fail into the future. And that is why we're going to see record levels of homelessness, record levels of rents and an undersupply of the crucial homes that we need social affordable and private properties.
So what we are seeing is a dramatic scaling up of social housing delivery. That is a fact. 9,000 last year and we want to be even more ambitious this year. Under the government's housing plan, we are determined to deliver 72,000 social houses over the lifetime of the plan. We are also determined to increase our affordable purchase properties and our cost rental properties.
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