In the past year rental prices in Galway city have risen by 11.3 per cent, according to the most recent Daft.ie report, published at the end of February.
Galway is now the second most expensive city in the country in which to rent a property. Dublin remains the most expensive city in which to rent, but the increase there in 2023 was only 2.6 per cent. Average monthly rents in Galway now stand at €1,999 compared to €2,384 for the capital city.
In the rest of Galway, rents at the end of 2023 were on average 14.8 per cent higher than a year previously, with the monthly rental figure standing at €1,487. The rate of increase in Galway city and county last year was significantly higher than the national rate of 6.8 per cent. This increased rate has led to new tenants paying on average approximately €300 p.m. more than existing tenancies.
‘Low availability’ is the reason cited by Galway based auctioneers as to why the Galway increases are of such a magnitude.
Landlord exodus from the market
In the city and county rental market, there is a lack of supply, as landlords continue to leave the market in record numbers. Three main reasons are cited for this exodus, 1 ) Increased regulation, 2 ) High property prices and 3 ) ‘Difficult’ tenants.
Many landlords now feel the odds are stacked against them, and all new government incentives in this area appear to be in one direction. They feel their rights are undermined and they are slowly losing control of their properties. Estimates suggest that for every three to four investors leaving the market, only one is looking to enter.
Based on the anecdotal evidence from Galway based auctioneers, there has been no improvement in this figure in the last year, indeed the figure could be closer to 10 leaving for every one entering the market. Government intervention in the rental market should encourage landlords to remain in the market, but any interference by government has had the opposite effect to that intended.
Another factor adding to the problem of increasing house prices, and lack of rental accommodation, is the number of houses being purchased by local authorities and Approved Housing Bodies for social housing needs.
The difficulty here is that for every house purchased in this manner, it is one less house available for a private purchaser or one less house available in the rental market. There is a lot of talk of ‘vulture funds’ buying up properties but the reality is that private purchasers, and those hoping to invest in a rental property, are more likely in Galway to be outbid by their local authority or an AHB (Approved Housing Body ), than by any ‘vulture fund'.
The proposed solutions from Galway based auctioneers are: tax incentives to keep small landlords in the market, and to encourage new investors into the market, even for a limited time period.
We need to improve infrastructure in services, water, waste and transport to facilitate the level of construction required. Many dealing with local authority planning departments are frustrated at the delays involved.
If government policy is to ramp up the building of houses and apartments, it is difficult to reconcile this with the behaviour of local authorities who do not seem to prioritise the facilitation of this policy.
This supplement contains information based in reports from the CSO, the property price register and the citizens information centre.
