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Student Crisis in the Housing Market

Conor Viscardi, UCD Students' Union President Kieran McNulty, TCD Student' Union President

23rd Aug 2016

Conor Viscardi UCD Students' Union President & Kieran McNulty TCD Student' Union President, commenting on the latest Daft.ie research on the Irish property market

Thousands of Leaving Cert graduates from the class of 2016 will need a new place to stay in a few weeks. But a cursory glance at the available data shows the difficulty of finding one. There were just 3,600 homes to rent nationwide on August 1st - 1,000 fewer than on the same date a year previously. The numbers for Dublin are lower still, with just 1,100 properties available to rent at the start of May.

Meanwhile, the average rent nationwide has risen by over one third since bottoming out in 2011 and has surpassed its 2008 peak. Monthly rents are now almost 10% higher than they were a year ago.

Rent Trends

This isn't a happy picture for anyone renting in Ireland. But 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 9 months instead of the standard 12 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. Recent promises of reform are largely dependent on measures aimed at the medium - long term. That isn't much help to young people looking to start studying in September. But there is an interim solution that doesn't depend on build time or industry reform.

Rent availability

By letting out empty room in their house as digs, Irish homeowners can put more bed spaces on the market tomorrow than any other stakeholder - including Government. Under the existing legislation, they can do this without going through a lengthy bureaucratic process and they are also guaranteed tax relief. The rental income on student digs is exempt from tax as long as it does not exceed €12,000 in a tax year.

The lack of paperwork and the financial incentives means that it is possible and profitable to increase student housing in this way in a very short space of time. But the scheme suffers from a lack of profile. The legislation behind it dates from the late 1990s, when it was introduced to increase the amount of rental accommodation, but Government only started funding large scale promotion of the scheme last month.

Rent highs

If this scheme doesn't see significant take-up, however, many young people relieved after their Leaving Cert results are going to have their spirits crushed. While available campus accommodation is generally allocated to incoming first years, it's not adequate to house them all. Funding cuts to higher education institutes have slowed down badly needed campus development and will continue to hinder it until they are reversed. High construction costs have similarly slowed down building activity in the wider market and there is now a distorted relationship between supply and demand with fierce competition as the result.

In this context, 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.

Least and Most Expensive Areas