Can’t buy me… house?
The recently published Daft.ie and the Economic and Social Research Institute reports have no good news for the housing situation in Ireland.
According to research by the ESRI, house prices could rise by 20 per cent over the next three years. The Daft.ie Rental Price report shows the national average rent is 1200 euro, and the rents in the capital are now nearly 23 per cent higher than at the previous peak, in 2008.
The reports prompted an immediate reaction from the members of the Sinn Fein party. Mary Lou McDonald, the deputy leader of Sinn Fein, says: “People have told me that the relationships are cracking under the strain of the housing emergency. That for lots of people in their late twenties to mid-thirties even the idea of starting a family now falls into the bracket of unaffordability. These are the very real human consequences for those struggling to get on the property ladder or struggling to pay their rent”.
The current rent and sale prices are barely affordable for the average worker, and there is no chance that a Dubliner who earns just above the national minimum wage could buy any property in the city. A recently evicted tenant tells us about her struggles to find new accommodation: “I’m talking about looking at places in Dublin 9 and I’m looking about being charged 800-900 euros a month, and yet, that’s without bills. So then you put in bills, you put in your travel, and everything else, and I don’t have any salary to feed myself.”
John-Mark McCafferty, the chief executive of Threshold, the National Housing Charity based in Dublin, thinks that enforcing Rent Pressure Zone would help. The RPZ legislation says a new tenant can only be charged 4 per cent more than the previous one. If the rent goes up, the landlord is required to provide a written detailed justification behind the new rent, including all relevant calculations. However, as there is no control, many landlords disregard the law. Dr Aideen Hayden, Threshold chair, says: “In this competitive market with such limited supply, tenants are hesitant to challenge rent increases at the RTB for fear of a relationship breakdown with the landlord. It is spiralling out of control. We once again call on the Government to introduce a publicly accessible rent register, along the lines of the Property Price Register. This would provide potential and sitting tenants with the details they need to make informed choices or to challenge illegal rent increases at the Residential Tenancies Board.”
All commentators agree that the shortage of supply is behind growing prices.
According to John-Mark McCafferty, “the country needed at least 40,000, possibly 50,000, new homes a year to meet underlying demand”. However, there is little chance that even 10,000 units will be built, as the construction process is a very costly venture.
But there is also some good news in the housing sector.
In Tallaght, South Dublin, nine families finally moved in into their own homes, after spending almost a year in a Family Hub (emergency accommodation for families). Overall, 50 families in Dublin were able to leave the temporary accommodation within the last week. Respond! Family Hubs are a new model that helps families find secure housing for a relatively short-term period. Founded in 1982, Respond! has built over 5,500 social homes since then and currently owns and manages 4,425 homes. Of course, this is not a long-term solution to the housing and homelessness crisis in the country, but thanks to Respond! Family Hubs, 47 kids are now living in their own homes with their families, and that is not bad at all.
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