herald

Monday 18 December 2017

Rising rent prices will stop young flying nest

young people may be forced to stay at home with their parents for much longer than ever before, a new ESRI report has warned.

A fall in rental prices after the property crash encouraged many young people to move out of the family home.

As many as 20,000 more people in their 20s and 30s moved out of their parents' homes in 2011 compared to 2006, because of the fall in rents caused by the economic crash.

The ESRI report said that 2.3pc more 25 to 29-year-olds flew the nest in 2011 compared to before the crisis. There was also a 2.1pc increase among 30 to 34-year-olds moving out.

Reconsider

However, with rising rents, people in their 20s and 30s may be forced to reconsider their accommodation options.

Many may now have to return home or delay moving out until a later age, David Byrne, one of the authors of the report said.

"I would characterise what we have seen as a large shift in behaviour as a result of falling rents," said Mr Byrne.

"Rent fell after the property crash, so young people could afford to move out and rent, often sharing accommodation. This is a change from what Irish people traditionally did."

Mr Byrne said the shift will most likely see many young people stay in the family home for longer.

However, he said that young people are increasingly weighing up the option of buying, amid rocketing rental prices. And this in turn is pushing up the price of property.

"When house prices increase, people often expect them to continue rising, providing an incentive to own instead of renting," he said.

"The model used in this research suggests that 2.6pc of those who would have been content to rent, would probably now prefer to buy. This is contributing to the upward pressure on prices."

The PRTB Rent Index shows that rents in the first quarter of 2014 were 3.5pc higher than in the same period last year. Apartment rents rose by 5.6pc while rents for houses were 1.6pc.

hnews@herald.ie

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