All cashed up but nowhere to live – renters squeezed by Dublin's housing supply crisis

A storm has been brewing for Dublin’s property market, with rentals rapidly becoming among the most sought after and unaffordable in the world.

The Irish capital has been expanding its reputation as a financial city thanks to low corporate tax rates, the recovery of its economy known as “the Celtic Phoenix” and its comparative stability in Europe following the fallout of Brexit.

But underneath that, homelessness, property costs, and the number of Airbnb listings have all sharply increased over the past five years, while home ownership has taken a dive and the number of new dwellings built has failed to offset demand.

The average monthly cost of renting in Dublin has reached over €2000 ($3262), far higher than the cost in Sydney of $2120, the most expensive Australian city according to Domain’s most recent house price report. 

The average income in Ireland is €45,611 ($74,405) while in Australia it’s $86,642 (both figures pre-tax) which means Dubliners are paying far more but earning lower incomes, which creates immense stress and forces people to put big life-changes on hold.

The problem is largely one of supply and demand; The latest quarterly report from Daft.ie found there were just 1200 homes available to rent in Dublin on May 1 – the lowest recorded since records began in 2006.

This chronic shortage of housing can be traced back to the country’s 2008 economic crash, which led to a construction industry collapse and the building of new dwellings grinding to a near complete halt.

Significantly, the number of homeless people around the country has increased from about 3000 to 10,000 in five years and the true number could be as high as 15,000, the majority of them in Dublin.

The number of homeless families and children in particular increased.

Paul Kearns is a former Dublin City council planner and author of two books on the city’s planning and urbanism. He attributes much blame to government policy, which has meant not building enough social housing and poor construction regulation, as well as allowing developers to buy up and sit on land to watch its value inflate.

“A significant factor is that the government and the Department of Housing, Planning and Local Government has, in its panic to address the housing shortage, repeatedly changed housing policy in terms of everything from apartment size standards, height and more,” he said.

“This has naturally generated enormous uncertainty and has resulted in ‘shovel-ready’ projects being constantly scrapped as developers sought to revise schemes with higher densities and lower standards. The irony is that in this race to the bottom on apartment standards and introducing smaller minimum sizes, we are actually delivering less housing.”

Mr Kearns says Airbnb is an easy target to blame for rental increases and its role may be overstated, but the solution to lower rents was to build more apartments and increasing Dublin’s density.

“Dublin has also failed over two decades and two construction booms to deliver a significant number of high-quality spacious apartment homes,” he said. “This is a suburban city wedded to living in a house and back garden. The failure to deliver high-quality apartments has suppressed demand for apartments. Inevitably, that feeds back into construction preferences and generates supply problems.”

Beyond the statistics, there’s a human element to the rental crisis. Living in Dublin has become incredibly stressful.

Retail worker Megan McConkey, 22, says the race to find a house or even a bed in the city makes people desperate and vulnerable to scammers.

“I pay €500 a month rent to share a tiny room with another girl,” she said. “Then in the other bedroom there are three boys all in the one regular-sized room with bunk beds. It’s a tiny apartment that would be ideally suited for two people.

“It’s in a great location, but something is always broken, it’s very old fashioned, only has the basics. I know this is a big claim but our landlord really exploits us and knows we need him more than he needs us. Once he left us without a toilet for an entire month.

“Meaningful action needs to be taken urgently. There is definitely momentum building against the government,” she said.

Emeritus Professor of Economics at Trinity College Dublin Patrick Drudy said the privatisation and financialisation of the housing market were to blame.

“The recent trend to sell off entire blocks of apartments to multinational companies rather than to private individuals is a serious cause for concern,” he said. “These operate in a light-touch and even welcoming regulatory environment but this“crowds out” young aspiring purchasers.

“A range of international property investors have purchased and now control an increasing proportion of private residential accommodation … Companies with these objectives cannot be relied on to provide affordable and secure homes for our people.”

The largest party in the Irish Parliament, Fine Gael, was widely criticised when housing minister Eoghan Murphy recently said people should be “excited” about the concept of co-living and “sharing smaller spaces”.

The party’s actual housing policies in this year’s budget provided an extra €30 million for homelessness services and made a commitment of €1.25 billion for the delivery of 10,000 new social homes this year. It’s unclear how many of these will be in Dublin.

According to Professor Drudy, the pressure is on for the government to spend big on construction rather than rely on the private sector.

“It is essential to continue to reverse the alarming reduction in the direct provision of public housing,” he said. “The proposal by the government … to build 35,000 homes for rent within the next few years and to refurbish many more represents a good start to redress this unacceptable situation.

“However, the proposal to provide for a further 75,000 social housing tenants in the private rented sector should be reconsidered. Housing is now a major political issue and unless this government is seen to ‘build’ far more homes, it is likely to lose the next election.”