Rents have increased four-and-a-half times faster in Ireland than in Europe over the last decade.
New figures from the Banking and Payments Federation Ireland (BPFI) show that rents in Ireland increased by 82% since 2010.
That’s compared to just 18% in the EU.
Over the same 12 years, house prices have surged 55% in Ireland and 50% in the EU.
On Newstalk Breakfast this morning, BPFI Chief Brian Hayes said there will be no easing of the housing crisis until the country significantly increases housing supply.
The former Fine Gael MEP said the moderation in house prices we have seen in recent months will be “pretty short-lived” unless we can quickly build a lot more houses.
He said Ireland’s sky-high prices are down to “three fundamental factors”.
“Obviously, one is the very significant latent demand that is there because of household age formation,” he said.
“Also, as we highlight in the report, a significant gap remains in average rents vis-a-vis average mortgages. Average rents are about €1,400, as against average mortgages of about €1,000 and, as long as that exists - and it is even more extenuated in places like Dublin - that pressure will grow in terms of demand.
“The last thing, which I think we don’t take enough cognisance of, is the growing population.
“That growing population - half a million extra people in the country in the last ten years, 360,000 in the last five years - that has been a real driver behind the demand for housing.”
Mr Hayes said that Ireland’s population is only going to grow at a faster rate in the coming years – as the economy continues to perform strongly when compared to our European neighbours.
“The pressure, really, is on supply and I think from our findings today, what we are saying is even though completions in this year are up … we are seeing a reduction in the number of commencements,” he said.
“Of course, if you see a reduction in commencements, you will see a reduction in supply because you can’t get more completions unless you get more commencements.
“That is the problem we see at the moment that we have got to address really across the construction industry.”
According to the BPFI report, housing commencements are now declining on an annual rolling basis – peaking at 35,000 during the first quarter of this year to 26,000 in October.
Mr Hayes said the government must act to make building cheaper – as the cost-of-living of living crisis continues to see the price of materials and construction expertise increase.
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