Apartment rents are up 15pc due to shortage
THE country’s biggest owner of apartments says rents have risen by up to 15pc.
Irish Residential Properties Reit (IRES), which owns 1,566 apartments, is seeking to buy up to 650 more units.
It said it is achieving rent increases of between 10pc and 15pc when leases are being renewed by tenants or when new tenants are moving in to a property.
This means that renters are having to pay up to €150 more a month on a €1,000 monthly rent. The average monthly rent for the company increased to €1,364 per apartment in June.
This is up from €1,070 per apartment in June last year – a rise of 27pc.
One fifth of people rent their homes across the country.
IRES chief executive David Ehrlich said the higher rent was due to a shortage of apartments, but also due to the group buying properties that command higher rents.
The company’s apartments are in Dublin, including developments in Smithfield, the Docklands and Sandyford. It has 100pc occupancy.
IRES, which is quoted on the Irish Stock Market, said it bought 362 apartments in the first six months of the year.
It generated a pre-tax profit of €14.8m for the six months to the end of June on the back of increasing monthly rents and high occupancy levels.
It expects continued strong growth in earnings due to a chronic shortage of properties to rent.
“Given current planning guidelines and the expense of new construction, the costs of building housing makes it
difficult for the severe shortage of accommodation to be rectified over the next several years at least,” said Mr Ehrlich.
He said the company has existing properties with between 600 to 650 apartments to be built, which it anticipates being developed in the near future.
He added that the group has a “significant pipeline” of future acquisitions available through Nama and private off-market opportunities.