Lack of affordable bed spaces in the capital for young people attending colleges

Marcus O'Halloran, Economist

18th Aug 2015

Marcus O'Halloran - UCD Students' Union President, commenting on the latest Daft research on the Irish property market

As President of UCD Students' Union, I'm very much aware of notions that issues affecting UCD students only affect people from Dublin 4. As a native of Cloneen, Co. Tipperary, I would be very vocal in reminding everyone that the accommodation crisis in the student market is affecting people from all over. The repercussions from this for students stretch the breadth of this country. Lack of affordable bed spaces in the capital for young people attending colleges impacts hardest on those based outside Dublin. They're generally not too familiar with the city market and if they're unsuccessful in finding somewhere to stay, they've a long & pricey commute ahead of them.

Rent-A-Room-Trends-Dublin

Areas traditionally rented by UCD students - Ranelagh, Rathgar, Rathmines, Clonskeagh, Booterstown & Stillorgan- have seen the sharpest rises in the Irish rental market over the last 5 years. Demand is so high for a place in these areas that prices have increased nearly 25% over the last few years. Rates are rising further right now as 1,000s of secondary school graduates look to fly the coup for 2015/16. A cursory glance at the available data shows the difficulty awaiting them as newcomers to a small and very competitive rental sector.

Furthermore, while rental sector rates have generally decreased in the regional areas of Ireland, Cork and Galway have experienced increases comparable to rate rises in Dublin. So young people in 3rd-level education across the country are being hurt by an overcrowded rental market in our urban centres. It's not just a question of them being out priced- even if rent is tied to inflation or capped by Government, the underlying housing shortage means inevitably high demand for housing will crowd out students anyway.

Presently 700,000 Irish people live in leased houses and apartments. That number is increasing every day. Almost 10,000 tenants join the rental sector every month. Many of these people would prefer to own their home but they can't get a mortgage. However, they're still in a more stable position than most Irish students- even those with good references & part time jobs- and because of that they win out with landlords and will continue to win out even if rental prices are fixed.

Commuter Counties & Rents Rise asset

The Construction Industry Federation of Ireland advocates lowering the cost of building as a solution to shortages of supply in urban centres. This might reduce property prices, facilitate more people buying and free up the rental market- in the long term. I don't know if this is the viable, sustainable route or whether policy makers should look to economic development outside of our main cities, where housing is more widely affordable. But I do know that none of the talking points on future action are staked in our corner of the market or the student specific crisis.

I have publicly called for student input into rental package agreements being discussed at a Cabinet level and am working on promoting rent-a-room schemes. Given the current situation, I am convinced that the greatest potential for alleviating the pressure on parents & young people looking for college accommodation is in rent-a-room schemes or "digs". Homeowners who rent out empty bed spaces in their primary residence can earn up to €12,000 of rental income without paying tax on it. I would definitely back developing this existing tax relief to encourage more homeowners to enter the market and provide rooms for students.

Mortgage-vs-Rent

Official figures from the Higher Education Authority project a student accommodation shortage for the next 10 years. University provided on-campus accommodation is severely limited and increasingly expensive- UCD have hiked prices by almost 30% over a 2 year period for bed spaces catering to 10% of the overall student population.

With Government ministers reportedly unconvinced that tax incentives for purpose-built student accommodation are the way forward, there needs to be an onus on action. It is my belief that there should be a concerted, national effort to promote rent-a-room schemes. Tax relief on rental income from digs should be increased, efforts should be made to ensure struggling homeowners are informed of the cashflow gains to be made & data should be collected so average asking price comparisons between digs and the private market can be drawn.

All the available data for housing in Ireland is pointing to a crisis caused by a cramped, overcrowded rental sector. Many young people still celebrating their Leaving Cert results today will defer courses because of it. Perhaps the worst is that Irish politicians seem oblivious to them. They will remain so at their own peril following the political mobilization for marriage equality & the number of young people now registered to vote.

Map of Ireland rents

Discuss This Article

  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Tuesday August 18, 2015 @12:39PM

    How is it possible that a 2 bed house is now at 723euro per month in Cork city - when last quarter it could be let at 898 euro per month. That's a 20% decrease yet the report states the the annual change is 10.8% increase. How is this possible? in fact all the figures for cork city are much lower in Q2 compaired to Q3.

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Tuesday August 18, 2015 @01:07PM

    If this report is correct, the rental cost for a 2 bedroom in Dublin has dropped substantially since the Q1 report. Is this a true reflection of the market?

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Tuesday August 18, 2015 @02:47PM

    Regarding my reply above - meant that all the figures for cork city are much lower in Q2 compaired to Q1 (not Q3)

    Can someone look into this please? A second poster (at 01:07PM) has picked up on lower rental prices in Dublin.

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Irene Date: Tuesday August 18, 2015 @05:07PM

    It's a nice case study for students, especially for those who specialised in data mining,haha

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: Nick Killian Date: Tuesday August 18, 2015 @09:30PM

    The figures for County Meath are not a true representation as the rental rates for houses and apartments vary greatly from North Meath to South Meath where houses prices are similar to Dublin prices.
    When Daft are next evaluating Meath they must differentiate between the north and south of the county.

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Tuesday August 18, 2015 @10:53PM

    It seems that D14 4 Bed rental values have fallen by 34%!!!
    Lot of the latest report figures look very strange

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: nemo Date: Wednesday August 19, 2015 @05:00AM

    This is incorrect. My mortgage is 794pm
    And I'm advertising this 3 bed semi fully furnished for 650. In sligo where exactly is the profit margin there???

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Wednesday August 19, 2015 @08:01AM

    Rental values for Dublin 14 in Q2 are not correct. They show a value of 1,264 for a 2 bed house and 1,580 for a 3 bed. This is calculated as annual increases of 10.3% and 8.6% respectively. But the Q2 2014 values were 1,411 and 1,649. Rents have certainly not fallen in D14 over the past year and the 2014 figures were in line with what was available then. I would guess that the percentage increase figures are about right but the actual values stated are wrong. There seems to be a serious problem with the data in this report and it needs to be checked and revised.

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Karen Date: Wednesday August 19, 2015 @11:15AM

    Hi Everyone,

    I have contacted daft regarding the odd figures and this is the reply I got:

    " For consistency, and in order to maximise comparability between the sales and rental reports, we have revamped the methodology underpinning both. Practically speaking, this means that there are now 54 markets (all 22 Dublin postcodes, 7 other urban markets, and 25 counties) which will be consistently reported on in both sales and rental reports from now on. But this does mean that, strictly speaking, the figures in this report are not comparable with those from earlier reports. (To overcome this, year-on-year changes in average rents for particular property types are given in the snapshots.) "

    I have requested they provide more detailed explanation on how the rental prices are now calculated.

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: frank Date: Wednesday August 19, 2015 @12:19PM

    The rising of the rent is a shame. Rents are too high and quality of the houses is so low.. landlords are slave drivers

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Wednesday August 19, 2015 @02:34PM

    I'm curious as to where all these 4 bedroom properties for 1659 are in the south city center?

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Wednesday August 19, 2015 @03:32PM

    I rent a 1 bedroom by mself in grand canal docks for 1500 euros which makes me want to cry. I thought Los Angeles was bad.

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Wednesday August 19, 2015 @07:42PM

    Are these numbers really correct or is this not yet another attempt by another business with a vested interest in higher rents and higher selling prices yet again talking up the market. Reminds me of the dying days of the last boom... And then we had the crash that destroyed the country.

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Wednesday August 19, 2015 @07:57PM

    Reports like this are self fulfilling proficies. create excuses to fuel rent price inflation.

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Thursday August 20, 2015 @10:13AM

    I agree. These reports fuel price rises. And when prices or the market slows - then we see less reports...

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  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Thursday August 20, 2015 @10:16AM

    I consumers continue to complain but still be willing to pay more - then these price rises will just continue....

    • Reply to this message
  • Re: The Daft Rental Report Q2 2015

    Posted By: Anonymous Poster Date: Saturday August 22, 2015 @08:10AM

    I been in City centre for 8 years,And this is the time I see the rental prices are rocketing...the agents/landlords just cadhing up on immigrants...

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