By Róise Collins
DONEGAL has the second lowest housing rent in the country despite the cost having risen by 16 per cent in the last 12 months according to a Daft.ie report released this week.
The average rent in Donegal at the start of May was €994 just slightly above that being charged in Leitrim in the same period at €960 – the county with the lowest rent.
As in recent quarters, the upward trend in market rents around the country have been driven by extraordinary shortages in the availability of rental accommodation. Nationwide, there were just 959 homes available to rent at the start of May.
There were only 83 homes available to rent in the three Ulster counties surveyed (Donegal, Cavan and Monaghan) in the same period.
In these three Ulster counties rents rose by 17.2 per cent year-on-year.
This is above the level seen on the same date in 2022 but less than half the typical availability seen during the late 2010s.
Compared to a year ago, market rents in Connacht-Ulster are over 15 per cent higher – the eighth quarter in a row there has been a double digit increase.
The Daft.ie report also compared the cost of buying with that of renting even with a possible two per cent interest rate rise in the county.
To buy a one-bed apartment in Donegal in May would see a mortgage of €373 per month.
A two per cent interest rate rise would take that to €457 a month.
However to rent that same property was €655 per month.
To purchase a two bed house here would have an average mortgage of €413.
A two per cent interest rate rise would bring it to €507, however, to rent that same property was €775 per month.
A three bed property to buy would see a monthly mortgage repayment of €597.
A two per cent interest rate rise would increase that monthly payment to €733. Renting the same house cost €887 per month.
To buy a four bed house in Donegal in May would see a mortgage of €1,106 a month. A two per cent interest rate increase would bring that figure to €1,357.
However renting that same property was €997 per month.
A monthly mortgage payment on a five bed house in Donegal in May was €1,078. A two per cent interest rate rise would take it to €1,322, while renting the same property would cost €1,133 per month.
Ronan Lyons, Associate Professor of Economics at Trinity College Dublin and author of the Daft.ie Report, said, “The private rental market has been under increasing stress over the last two years, as first society reopened after the Covid 19 pandemic and then the war in Ukraine led to a refugee crisis.
“There are some signs that, if things are not getting better, then they are getting much worse. Availability of homes to rent has stopped falling, albeit at extremely low levels, while the quarterly change in rents seen January to March was far smaller than the average increase seen in 2021 and 2022.
“Nonetheless, the solution to Ireland’s rental housing shortage requires significant action by policymakers. Ultimately, policymakers must have a clear plan on how tens of thousands of new rental homes will be delivered this decade in all major towns and cities.”
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