Rents rocket across Galway city

The housing crisis across Galway show no signs of abating – with the latest figures recording an almost nine per cent rent hike in the city, and tenants paying nearly one fifth more in the county compared to a year ago.

Record annual inflation combined with a surge in rents in the first half of 2021 means that rents in Connacht-Ulster – up by over 20% compared to the year before – have recorded the strongest rate of inflation on record in any region since 2006.

The latest quarterly report from Daft.ie found that renters are now forking out an average of €1,504 for a home In Galway City – a jump of 8.8% in the last year and the third highest in the country after Dublin and Cork.

In the rest of Galway, rents were on average 19% higher in the final quarter of 2021, with the average listed rent now €1,138 – up an astonishing 123% from its lowest point.

In the city, a one-bed apartment commands €1,026 (up 12%), a two-bed home is an average €1,207 (up 11.5%), a three-bed home costs €1,407 (up 11.6%) and a four-bed house rents at just under €1,700 (up 8.4%).

Across the county, the rents averaged €778 for a one-bed and €908, €1,021 and €1,151 for two, three and four-bed properties respectively.

Rents for bedrooms which are traditionally favoured by students also jumped. A single bedroom in the city centre costs €475 a month while a double bedroom costs €558. Moving out to the suburbs is only marginally cheaper at €460 and €534 respectively – the suburbs showing the biggest hikes of around 5% and 10% compared to 2021.

The report highlights the lack of supply which is continuing to drive the rent inflation. In the entire Connacht region just 108 homes were advertised for lease on February 1, down 22% compared to a year ago.

It was the second lowest number ever advertised since 2006 according to Daft.ie. The pre-Covid average during 2019 was 600.

Wishful homeowners can only look on aghast as figures show how much more economical it would be to buy.

The report states that in Galway City a one-bed apartment would cost €512 in an average monthly mortgage instead of €1,026 in rent.

A two-bed house would be €625 in mortgage repayments as opposed to €1,207 rental while a three-bed would involve repayments of €944, which jumps to €1,407 in rent.

In the county the situation was just as stark. A two-bed and three-bed property would cost €387 and €552 in monthly repayments instead of €908 and €1,021.

Ronan Lyons, Associate Professor of Economics at Trinity College Dublin and author of the Daft Report, said the strong rebound in economic activity, as public health restrictions relax, has translated into a strong demand for rental accommodation.

“Coming at a time of very weak rental supply, this has pushed rents up further, with inflation at its highest rate nationwide since early 2018. The number of live rental ads is at its lowest ever on record, with fewer than 1,400 live ads on February 1,” he stated.

“As ever, the solution remains in the construction of large numbers of market- and cost-rental housing, to cater for tenants of all incomes. Reform of rent controls would also enable new rental homes to be built faster.”

Threshold, the national housing charity, pointed out that Galway City is designated Pressure Zone (RPZ), which means that rents cannot be increased by more than general inflation as recorded by the Consumer Price Index – or by 2% per annum – where this is higher.

Threshold chief executive John-Mark McCafferty said one-in-five private tenants in Ireland were spending more than 40% of their disposable income on rent.

Close to one-in-ten private renters pay more than 60% of their earnings on rent. They were also at greater risk of poverty, more likely to be burdened by debt and have gone without heat at least once in the last year.

“Threshold advisors have found approximately half of the rent review notices brought to them in 2021 were invalid. Unfortunately, in some cases the tenant accepts the invalid notice for fear of being unable to find a new rental home. Threshold urges all private renters to get in touch when they receive a rent review to check the validity of the rent increase,” he stated.

Raising the matter in the Dáil, Sinn Féin TD for Galway West Mairéad Farrell called on the Taoiseach to act urgently on the rental crisis in Galway.

She urged the Government to immediately introduce a three-year ban on rent increases across the country and give renters a tax credit equivalent to a month’s rent.

“The Government’s 2% rent cap is clearly not working. We need a ban on rent increases on all existing and new tenancies, and we need government to put money back in renters’ pockets through a refundable tax credit worth a month’s rent,” she insisted.

“The ban on local councils buying homes with HAP [Housing Assistant Payment] or RAS [Rent Accommodation Scheme] tenants in-situ where the landlord is selling up is also forcing families into homelessness while the properties are being sold to investment funds, who lease these same properties back to local authorities. This makes no social or economic sense.”