The ongoing rental crisis is creating a pensions time-bomb that will have to be dealt with in the future, according to financial analyst Karl Deeter.
It comes after the latest Daft.ie report warned that rents have increased at record levels outside Dublin over the last year amid 'chronic and worsening' supply shortages
Nationally, rents increased by 5.6% in the past year; however, some areas saw double-digit increases.
The report recorded a 14% outside of the three main cities in Munster and a 15% increase in Connacht-Ulster.
The increases are due to a ‘chronic’ lack of supply – with just 2,455 homes available to rent on August 1st a figure described in the report as ‘extraordinarily low for a country of Ireland's size.’
On The Hard Shoulder this evening, Karl Deeter from Irish Mortgage Brokers said the crisis was pushing people into ‘reckless renting.’
“You can’t buy a home because the bank will stop you from borrowing but nobody stops you from paying too much rent,” he said.
“That is now becoming somewhat systemic and there are knock-on effects when you start to spend your money in an unwise fashion.
“I am not saying paying for accommodation is unwise you have to live somewhere but the price is such that it effectively treats you like an additional tax … then that plays into the age that people will have children at, the age they can buy a home at, the age their children will be when they are retiring, funding for colleges, funding for pensions – there is a whole host of knock-on effects.”
He said the crisis is fuelling even deeper problems in the future.
“It’s going to create a pension time bomb as well because Irish pensions were designed for people who own houses outright, they are not designed to pay for rents,” he said.
“Then when that time comes and all these people are retiring, we can’t suddenly make them homeless so we are going to have to pay for that and figure something out.”
Also on the show, Waterford estate agent John Rohan said the area simply does not have the supply to meet demand.
He said a rental property advertised yesterday received 60 emails in a day and was snapped up straight away.
“There is far more demand than there is supply,” he said. “Demand is phenomenal absolutely.
“We don’t have the supply. We don’t have the supply to sell and we don’t have the supply to rent and when a rental comes on the market, the demand is just phenomenal.
He said he sees no end in sight to the crisis in Waterford.
“I can’t see rent prices stabilising,” he said. “The demand at the moment and for the foreseeable future will far exceed supply.”
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