More than 4,600 people have applied to become tenants of just 195 cost-rental apartments at Shanganagh Castle in south Dublin, the highest number for any of the State-subsidised rental schemes to date.
The high number of prospective tenants seeking to be selected for one of the Land Development Agency (LDA) apartments demonstrates the popularity of the new rental model which offers long-term tenures and stable rents typically 25 per cent below local rates.
However, it also indicates the acute dearth of homes to rent, particularly in the Dublin area.
Applications for the apartments, with rents from €1,175 a month for a studio, €1,250 for a one-bed, €1,575 for a two-bed and €1,775 for a three-bed, were open for just one week. By Tuesday afternoon 4,608 completed applications were received but just under half of these applicants – 2,215 – met the eligibility criteria for the scheme.
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Typical price paid for home by first-time buyer up €88,000 on five years ago
A lottery will be run in the first week of January to select renters from the eligible applicants.
Cost-rental housing is aimed at low- and middle-income workers earning up to €66,000 after tax. However, other eligibility terms apply. Applicants must be able to demonstrate they can afford the advertised rent, which should not account for more than 35 per cent of their monthly net income, although some flexibility is allowed for renters who can show they were managing to pay higher rents in the private sector.
Housing academic Lorcan Sirr said the huge number of applicants for such high-priced rental accommodation points not to the need for more rental accommodation, but to the lack of housing available to buy.
“The rent for these is the equivalent of a mortgage. Actually, the three-bed is more expensive than a €350,000 mortgage. This says to me there are an awful lot of people out there desperate for a home to own, who could afford mortgage repayments, but can’t find anywhere to buy.”
In another indicator of the big affordability challenge for prospective purchasers, a report on Friday shows first-time buyers are typically paying €88,000 more for a house now than they did five years ago.
In its latest mortgage market report, the Banking and Payments Federation Ireland (BPFI) said the median income of first-time buyers buying a new property in the first half of 2024 was €90,000, while their median age was 35. This is significantly older than in previous decades.
The median income for existing homeowners moving to a new property using a mortgage was €118,000.
The report found that the median or mid-value price paid for property by a first-time buyer (which could be single person or a couple) rose from €272,000 to €360,000 between the first half of 2019 and the first half of 2024.
Applicants for cost-rental housing cannot be in receipt of any social housing supports, including rent supplement or housing assistance payment (HAP) and must not own a property. The home they apply for must also match their household size.
At Shanganagh Castle, the one- and two-bed apartments proved by far the most popular in the development. Of the 2,215 eligible applicants, 216 are seeking to rent the 19 studios, 896 are vying for the 40 one-beds, almost the same number, 892, want to rent one of the 107 two-beds and 211 want one of the 29 three-beds.
While cost-rental did provide more security than the private rental sector, it was proving too expensive, particularly in Dublin, said Mr Sirr, a lecturer on housing policy at Technological University Dublin. “There is a fundamental flaw in the Irish model of cost-rental, which seems unique across Europe, that the cost-rental is more expensive than a mortgage.
“The policy emphasis for the next government should be not on the development of housing specifically for rent but the development of housing for people to buy at affordable levels.”
Figures published by the Department of Housing on Thursday show construction started on 54,574 homes in first 11 months of 2024 – 84 per cent more than the same period last year
The largest number were in the Dublin City Council area (6,724) followed by Fingal (5,483) and South Dublin (4,486). However, just 2995 were in Dún Laoghaire Rathdown where the Shanganagh estate is located.
The LDA is building almost 600 homes in the estate near Shankill in what is the State agency’s largest development to date. The first 51 “affordable purchase” houses costing up to €495,000 have recently sold, and 40 more apartments will be offered for sale next year. Another 111 cost-rental apartments will be available in 2025. The remaining 200 apartments will be used for social housing.
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