Dublin’s rental crisis is the ‘worst ever’

Speaking of Sunday independent This weekend, Mr Reilly said his agency’s latest statistics show rental transactions are down 30 per cent compared to January and February 2021. “Dublin will deliver more office space this year than in the Celtic Tiger years as many offices have been delayed over the past two years due to lockdowns and site closures.

“Now a huge number of offices will come online this year and all are pre-let, meaning thousands of people returning to offices will be looking for rental accommodation when supply is at an all-time low. At the moment my colleagues see 10 tenants for each property.”

The situation could worsen in the coming months, he said. “What we are seeing today is the complete reversal of rental property availability in Dublin during lockdown. Now renters feel they don’t have much choice and in some cases quality can be lacking depending on budget. This crisis is particularly pronounced in the middle and lower end of the market, where there are very few affordable rents.”

The rental race means people are going the extra mile to find an apartment in time for their return to the office: “We have people emailing us, not on the back of a specific ad, but with a resume about themselves and a note to say that they find it very difficult and ask if we have anything. People keep calling the office and wondering what we have. We’ve had calls from people who aren’t returning to Dublin until May and are already emailing us asking if they can book something for two months now.

“It’s going to get worse between now and the summer when all these big offices fully reopen. You will have people working in Grand Canal Dock coming from Louth and north counties Dublin and Meath. It has already happened to students and it will happen to workers.”

When asked about the reasons for the lack of supply, Mr. Reilly pointed out that small landlords are exiting the market due to taxation, regulation and rising values. He said rent caps, while welcome to tenants, are causing people to stay in properties longer – the agency’s average lease length is 28 months, compared with 14 months five years ago. Also, “more people who should be buying but can’t are renting.”

Asked whether mutual funds are also exacerbating the problem in Dublin’s prime locations, Mr Reilly said: “Unfortunately the fund needs to generate a return because these blocks of flats are so expensive to build and they tend to be higher than average rents, but they are stay somewhere else for free.”

The company’s latest data shows the frustration among those hoping to sell their homes in Dublin. “Since the beginning of the year we’ve been seeing a lot of people looking to upgrade or trade down, and they’re extremely frustrated with the lack of what’s out there. They want to sell but find that they have very few options, so one low offer creates another low offer.

“This could change in March and April, which are traditionally busy months for property launches. But compared to the same period in 2020, our offers are 35 percent lower.”

Statistics from the agency’s transaction data since the beginning of the year show that 74 per cent of buyers are owner-occupiers, with 41 per cent being first-time buyers, 26 per cent investors and a significant number – 64 per cent – buying property without a mortgage, 85 per cent being Ireland and that average shopper age is 40. A decade ago, the average shopper was 34 years old.