Rent hikes may force students to defer college courses

Rents in Galway have hit Celtic Tiger levels again, prompting a warning that some prospective students will be forced to defer their college courses.

The warning came from economist Ronan Lyons this week with the release of a new report on rents from property website Daft.ie which also highlights a serious lack of available accommodation.

Rents being charged for private accommodation in the city are now on a par with the height of the economic boom in 2008.

Mr Lyons warned that many young people on a high after their Leaving Cert are destined to have their “spirits crushed” because of the situation in rental market.

At the moment, rents in the city are averaging €932 per month, which is a 13.9% increase on the same time last year.

The figure is also on a par with the €933 per month average which was hit in Galway in the third quarter of 2008.

Economist Ronan Lyons has warned that unless there is a significant take-up under the ‘rent-a-room’ scheme – which allows homeowners to earn up to €12,000 tax free per annum – students from outside urban areas will be forced to defer their courses.

“The class of 2016 are really stuck between a rock and a hard place. They’re low income newcomers to the most competitive areas of the housing market because the colleges they’re attending are mostly city-based.

“The majority can only afford to let for nine months instead of the standard twelve and don’t have the stable earnings or references of a full-time professional. In the private rental sector right now, it’s unlikely they’ll get a viewing, let alone a lease. This situation in the general market is not going to change over the next few weeks.

“College authorities, students unions and Government need to promote college digs as a priority over the next few weeks to make sure Irish homeowners are informed of how they can contribute to solving this crisis and the cash flow gains to be made.

“Otherwise many young people coming from outside urban areas — who don’t live near a university and can’t shoulder the costs of a long, pricey commute — will have to defer their college courses this September,” said Mr Lyons.

The Daft.ie report shows that in Galway City, rents are up 41.6% since they ‘bottomed out’ in late 2011.

A breakdown of the figures for the city shows one-bed apartments are renting for an average of €672 (up 10.7%); €773 for a two-bed house (up 15.1%); €936 for a three-bed (up 12.1%); €1,017 for a four-bed (up 13.2%) and €1,258 per month for a five-bed, which is an increase of 20.9%.

Other figures in the report show that under the ‘Rent a Room’ scheme, a single bed in the city centre is renting for an average of €347 per month (up 7.4%); and a double bed for €416 (up 10.6%).

In the suburbs, single beds are averaging €311 (up 5.8%) per month and double beds €373 (up 11%).

Meanwhile, in the county, monthly rents are averaging €631 – that’s up 7% on last year, and almost 24% since the bottom of the market.

A breakdown of figures for the county show that a one-bed apartment now rents for an average of €451 (up 2.8% over the past year); a two-bed house for €512 (up 5%); a three-bed house for €620 (up 2.3%); a four-bed house €674 (up 3.3%) and a five-bed house for €767 (up 10.3%).