Average private rents in Ireland have almost doubled in 10 years, according to a new study.
The research by the Economic and Social Research Institute (ESRI) found that average private rents rose from €589 to €1,084 per month between 2012 and 2021, an increase of 84%.
The study found that young and low-income renters were bearing the brunt of the increased costs.
“These rising rents have led to a substantial decline in the affordability of housing for young and low-income private renters,” the ESRI said.
To illustrate this, the study calculated that the average housing cost to income ratios — a common measure of housing affordability — rose from 0.226 to 0.304 for private renters in the lowest fifth of the income distribution.
In other words, more than half of low-income private renters are spending more than a third of their income on housing. This compares with just 15% for supported renters (those in local authority housing or those in receipt of the housing assistance payment [HAP]) and just 7% of people who own their own homes.
Younger age groups in the private rental sector had experienced a similar affordability squeeze, the study found.
The deterioration in housing affordability for renters comes despite what the ESRI described as the continuation of broad-based income growth for the population as a whole “which has left income inequality at a new record low”.
The report also showed that a third of people below the poverty line last year were in work, while many of them held a third-level degree.
Such “working poor” individuals make up approximately 220,000 of the 625,000 below the income poverty line before housing costs, and 333,000 of the 740,000 below the income poverty line after housing costs.
“This is despite their much lower income poverty rates, and reflects the fact that households with someone in paid work make up the bulk of the working-age population,” the ESRI said.
While 56% of the working poor are in a household where at least one person possesses third-level educational attainment, the corresponding figure for those in working households above the poverty line is 76 per cent.
“Therefore, while it is true that, on average, those non-poor working households are more likely to include someone with third-level education, the educational attainment among the working poor is still relatively high,” the report said.
“We estimate that there are approximately 122,000 individuals who, despite being in a working household with a highly educated person, are still at risk of poverty.
“It is important to fully understand the reasons behind this. It may be that many highly educated individuals with valuable skills are precluded from fully utilising their qualifications due to, for example, childcare constraints.
“On the other hand, it may be that some individuals possess third-level qualifications that are not in demand in the labour market. This could be due to, for example, technological change rendering skills obsolete.”
