herald

Saturday 24 August 2019

Cheaper to buy a home now as rent tops €2k-a-month

Eoghan Murphy
Eoghan Murphy

Dublin property rentals are now an average €2,002 per month - making it cheaper to buy with a mortgage.

A Daft.ie report records Irish rents rose 1.5pc in the first quarter of the year to €1,366. In Dublin the average is €2,002 - an increase of 6.8pc in a year.

The number of homes available to rent across the country is now at the lowest level since 2006, at just 2,700 homes.

Prices

It is now cheaper to pay a mortgage than pay rent in all areas for starter and family homes, according to the research.

It comes as new rules that will severely weaken landlords powers of eviction are to be signed into law within the next fortnight.

Tenants are to benefit from a more than doubling of the notice period and stricter guidelines around evictions.

The changes have been described by Housing Minister Eoghan Murphy as the "most significant reforms" in the sector since the introduction of rent pressure zones (RPZs).

Mr Murphy said the Residential Tenancies Bill 2018 provides the "ambitious and wide-ranging reforms" which are exclusively "in favour of tenants".

The RTB meanwhile, recorded a 53pc increase in the number of complaints from tenants over rental prices in the space of two years. In 2015 there were just 313 dispute applications in relation to rents. By 2017, that figure had risen to 481.

Daft.ie carried out an analysis on whether it was cheaper to rent or buy using a standard 30-year mortgage, with 85pc loan-to-value and on a rate of 3.5pc variable mortgage on average house prices in each region.

It found that for a one-bed apartment or a two-bed and three-bed house, it was cheaper to pay a mortgage than rent in all areas of the country, even allowing for a 2pc increase in interest rates.

In north Co Dublin, for example, a one-bed apartment might cost €618 per month in mortgage repayments but that is in an area clocking up average rents of €1,247 for the same property.

In Dublin 16, a mortgage on a three-bed home might cost €1,598 but renting the same would cost on average of €1,919.

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