Dublin Tops European Rental Costs

In a recent report by Deloitte, Dublin tops European rental costs, with an average monthly cost of €32.8 per square metre. The Deloitte Property Index 2023 extensively studied new apartment costs, rental rates, and residential market trends across 27 European countries. The findings highlight the persistent challenges faced by Dublin residents in the wake of soaring rental prices.

(Also read Irish Version of ‘The Traitors’-RTÉ’s Exciting Adaptation.)

European Rental Costs Ranking 2023

Following Dublin closely in the ranking are Paris (€28.5) and Oslo (€28.0), underlining a broader trend of rising rental costs in major European cities. Conversely, cities in Bulgaria, Greece, Slovenia, Italy, and Hungary continue to offer more affordable rents, with Prague securing the twenty-third position at an average monthly rent of €14.4 per square metre.

The high European rental costs are exacerbating the ongoing affordability crisis, making it increasingly challenging for residents to cope with living expenses. The study also sheds light on the larger issue of supply and demand imbalances in the Irish residential market.

Despite a notable 45% increase in new home completions to 29,851 units in 2022, the demand for housing, ranging from 40,000 to 60,000 units annually, continues to outstrip the supply. The report projects a lower number of construction start-ups in 2023, with just under 13,000 units expected between January and May. Factors such as planning constraints, viability issues, and infrastructure challenges, compounded by rising construction costs and interest rates, are identified as key obstacles in addressing the housing crisis.

The report also reveals a 21% decline in planning permissions to 34,177 units in 2022, marking the first annual decrease since 2012. Supply-demand dynamics contributed to a peak of 15.1% in price growth in March 2022, subsequently easing to 7.7% by December. Monthly fluctuations indicate a potential shift in price inflation for 2023, particularly for both new and second-hand homes.

In contrast to the housing market, the rental market continues to face chronic supply shortages, resulting in continuous growth. The decline of small landlords and persistent stock constraints for large institutional investors contribute to the challenges. While government initiatives such as the Cost Rental Scheme aim to address affordability concerns, uncertainties regarding the availability of rental accommodation linger, potentially impacting economic expansion.

The Deloitte Property Index 2023 serves as a stark reminder of the pressing need for comprehensive solutions to tackle the housing crisis in Dublin and underscores the significance of addressing both rental and homeownership challenges to ensure a sustainable and equitable future for residents.