Buying a home is not for the average person anymore. According to Daft.ie, the housing marketing is currently struggling due to poor supply, while the rental market continues to soar. The market is in such a bad state that students renting homes are becoming a thing of the past. Students just simply can’t afford the high prices of rent or struggle to find suitable accommodation.
In addition to this, landlords don’t want to rent homes to students anymore as they can easily find a working couple or family to lease the property who can provide good references. Why is this? Families and young couples cannot afford to buy, so they are forced to rent, which means a landlord could be guaranteed a long-term lease as a result. According to the Daft.ie rental report for Q2 of 2016, rental rates have rose by 11% in a year. As of August 1st 2016, there were just 3,600 homes to rent nationwide, 1,000 less than the previous year. This volatile market is caused by a serious housing shortage across the nation; mix this with housing prices that are out of range for first time buyers but play into the hands of property developers, and you have the current market conditions.
The average price of rent nationwide currently stands at €1,037 per month which works out at €259.25 a week. This would be easily achievable for a full time professional but for a first time student, it’s very unlikely. As a result, Universities and Institutions have been heavily investing in on-campus accommodation, focusing on finding a short term solution to the shortage. A new category of renting specifically in the student market has grown in the lasts number of years.
Third level institutions are advising home owners and families with spare rooms to rent out these rooms to students. Digs provide students with a room, electricity and heat and, in some cases, food at a reasonable rate. The idea is that students would get the luxury of living in a home while paying considerably less than renting a property. The advantage for Universities and Institution is that it reduces anti-social be behaviour outside of class hours and for parents the comfort in knowing that their son or daughter is being looked after.
According to Daft.ie, Irish homeowners can put more bed spaces on the market tomorrow than any other stakeholder including the Government. The rental income on student digs is exempt from tax as long as it does not exceed €12,000 in a tax year which gives a nice incentive to Irish homeowners. Digs are becoming more and more common that they can be easily found through rental websites or your local student accommodation office.
Third level institutions continue to build more on campus accommodation but with funding cuts, it is slowing their progress. At the current rate that student accommodation is being built, it will be a number of years before institutions will be fully to meet the demand of student housing.
The concern is, if homeowners do not continue to rent their spare rooms many first year students next September will be forced to commute long distances or defer and have their dreams crushed.