Big spike in demand sees rents on the rise in city

Date Published: 22-Nov-2010

BY ENDA CUNNINGHAM

Tenants in private rented accommodation in Galway City have been hit by the biggest rate of rent increases in the country over the last three months, according to a new report.

A huge spike in demand for rental properties – caused by a lack of confidence in the property market and the collapse of the economy – saw rents driven up by 3.2% in the third quarter of this year.

According to the new report from property website Daft.ie, rents rose by an average of 0.5% across the country.

However, the increase in Galway City was more than six times higher, and rents here now stand at an average of €834.County Galway, on the other hand, recorded a drop of 1.4%, where rents now average €583.

But while Galway City did see a notable increase in rents in recent months, averages are still down 17.2% from the peak in February 2008, and the year-on-year figure still records a 0.6% drop.

At the moment, a one-bed property in the city is averaging €573 per month; a two-bed €762; a three-bed €848; a four-bed €936 and a five-bed €1,198.

For comparison, rent increases in the third quarter of the year in other cities saw Dublin up 0.3%; Cork up 0.4%; Limerick up 0.8% and Waterford up 1.1%.

A leading economist with the Economic and Social Research Institute (ESRI) believes that ongoing increases in rent may drive people back to the property market.

Professor John Fitzgerald said: “The recovery, which is clearly underway, will eventually begin to drag the rest of the economy back to growth. Then, with employment rising, incomes stabilising and prospects becoming brighter, more people will seek rental accommodation.

“In turn, as the excess supply dwindles, rents will begin to rise.”

Read more in this week’s Connacht Sentinel