HOUSING in Limerick has become so unaffordable that a single person would have to be earning almost €50,000 per year for a studio apartment to be affordable, new data has claimed.
The stark figures come from Limerick Chamber’s newly-released Rental Barometer, which looked at data collected about Limerick’s rental market over the past 13 months, including from the Chamber’s monthly Mid West Rental Monitor.
Data gathered by the Chamber showed that, for the average single person earning between €30,000 and €40,000 per year, no rental housing option is affordable, and that one would need a salary of nearly €50,000 to make renting even a studio apartment affordable.
According to the government’s Housing Agency, affordable rental accommodation is described as one costing less than 35 per cent of a person’s net income. Any rental spending that amounts to over 35 per cent of a person’s net income is therefore deemed unaffordable.
New findings by the Chamber show that a one-bedroom property doesn’t become affordable for a single person until they’re earning almost €70,000 per year, while a single person looking to afford a two-bedroom home would need to be earning almost €90,000 per year.
By the Chamber’s estimation, a two-bedroom property would cost a single person on €30,000 per year as much as 80 per cent of their annual salary.
Limerick Chamber Chief Economist and Director of Policy Seán Golden described the findings were “deeply troubling”.
“It is deeply troubling that working people earning €30,000 to €50,000 per year can’t rent anywhere affordably,” he told the Limerick Post.
“Most of this cohort would likely qualify for social housing, but given that there are so many on the waiting list and so many people already using HAP and RAS, securing rental through that avenue would be very difficult.
“However, affordability issues aren’t isolated to lower incomes. It is very worrying that to affordably rent a one-bed in Limerick as a single person you’d need to be earning close to €70,000 per year. This is well over the national median income.”
The high cost of rental accommodation in Limerick is having a knock-on effect on employers, Mr Golden said.
“Not only does this mean that employers are having trouble attracting and retaining staff, it also means that housing costs are a significant driver of wage demands and wage inflation – which could make Ireland unattractive for business in the long-term and that we might struggle to retain our educated people.”
Limerick Chamber’s Rental Barometer also examined the affordability of larger rental homes for a couple with two children.
It examined the rental prices of three and four-bedroom homes compared to annual salaries and found that a three-bedroom home becomes affordable for a couple once they earn a joint salary of €80,000, while an annual joint income of €100,000 would be needed to make a four-bedroom home affordable.
A key difference in affordability statistics between single people and couples is tax, according to Limerick Chamber, because a single person earning a large salary would be in a higher tax bracket, whereas the couple may not be.
The Chamber’s Rental Barometer also found that supply of rental properties across the county remained a “chronic” issue, with just 41 properties available to rent on average each month that was surveyed.
By local electoral area (LEA), the region with the lowest average monthly rent price was Newcastle West at €1,284.
Limerick City East had the highest average rental price per month coming in at €2,101, closely followed by Limerick City North on €2,028.
In the last 13 months, the Cappamore-Kilmallock LEA saw the lowest supply at just 61 homes available to rent. Limerick City West had 162 in the same period.
Sending out a strong message, the Chamber said that the information contained in the report “should serve as a warning sign to increase affordable and private market activity in the sector, or else the problem will become so embedded that we will be unable to change the dial”.
