Construction BUSINESS

Nearly a quarter of all households in Dublin are living in private rental accommodation, according to new research based on CSO data from Savills Ireland.

Since the beginning of 2011, the number of persons renting privately has risen by 61.3% to 328,700. The number of housing units being used in the private rental sector has jumped by 43,120 in this time, while nationally 24,128 extra units have been added. This surge, however, has barely been sufficient to meet demand.

According to Savills, this contradicts claims from some estate agents and business associations that landlords are fleeing the market and the sector is contracting.

Director of Research, Dr John McCartney, says: “With rents back to boom-time levels, income yields on residential property are much more attractive than the returns that are available to investors who leave their money in the bank or buy a bond. On top of this, investors are generating wealth from capital appreciation – it’s a no-brainer for people with the cash.”

Commenting on demand still outstripping supply, McCartney added: “House price inflation, sluggish wage growth, weakened household balance sheets and tight mortgage lending have conspired to drive people who would otherwise have been owner-occupiers into the rented market. At the same time social housing tenants are increasingly being housed in private rented accommodation. This has driven a huge increase in rental demand.”

You can view the Savills report here.