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Forbes
3 days ago
- Business
- Forbes
Poised For A Shift: Brooklyn Summer 2025 Real Estate Preview
Brooklyn's spring momentum, marked by sales prices breaking $1 million and asking rents breaking ... More $4,000, suggests a story of underlying strength. Brooklyn's summer 2025 market is being shaped by rising supply, record rents, and surprising price resilience, even as the market environment remains lackluster with softer demand – showing that Manhattan's stronger start and April volatility don't necessarily set the tone across the river. To find out what's happening beneath the surface in Brooklyn, we created a multifocal view that stitches together supply and demand, Market Pulse, Market Climate, sales prices, and asking rents to map out what lies ahead for buyers and sellers in the borough in the coming season. As much as Brooklyn's idiosyncratic allure is responsible for its increased popularity over the years, its real estate market is fundamentally driven by supply and demand dynamics. For the last several years, supply has been anemic, and demand, even when lackluster, has driven the market higher. This year, however, the tables may have finally flipped. Let's break it down. Supply in Brooklyn, 2022 through 2025 Brooklyn has seen a quiet resurgence in supply. At the beginning of the year, it was at its lowest point since before the pandemic, following a multi-year deceleration. Sellers began to come back to the market in February, March, and April, and now supply sits nearly even with 2022's levels. In three months, the level of inventory in Brooklyn went from long-term lows to medium-term highs, and currently sits 8.5% above last year's level. The increase in supply is generally even across the under-$1-million segment and the $1-million-to-$2-million category at 7%. Interestingly, it is the over-$2-million segment that shows the greatest increase, nearly 13% compared to last year, which is likely due to slowly increasing prices rather than a sudden jump in the desire to sell. The rolling 30-day pace of signed contracts in the borough is up just over 6% higher than last year, but momentum varies by price. The over-$2-million segment is the only one seeing an uptick in demand over the prior year, and, at just 1%, it is essentially flat. Demand for units under $2 million is down by 4% compared to last year. That may seem minor, but 2024 was not a year to remember, so being down from that suggests that under-$2-million buyers remain skeptical. Year-over-year change in supply and demand at different price points Brooklyn's Pulse index, a ratio of demand to supply, is down 2.8 points year-over-year, its weakest reading in five years, and sits at the bottom of the neutral range. This dip reflects the current imbalance between supply and demand. If new listings taper off in May and June while signed contracts hold firm, look for the Pulse to recover as we head into summer. Brooklyn's Market Pulse, May 2022 to April 2025 The UD Climate Ratio (successful vs. failed listings) dipped slightly to 2.61 in April. While this is still the second-highest reading in the last year, it is down from the March reading. On a longer-term basis, the Brooklyn Climate's peaks remain below the highest levels seen in 2022, 2023, and 2024. The gradual decline of the Climate's seasonal summits suggests that buyer caution remains elevated. So, while deals are still being done, the market landscape is fragmented, with varying pockets of strength and weakness depending on the attributes of individual properties. Brooklyn's Market Climate, May 2022 to April 2025 The first quarter of 2025 saw the Brooklyn median sale price break the $1 million mark for the first time at $1,022,500. Currently, sales in the second quarter appear poised to increase, with recent sales having a median price of $1,024,400. While this may only be 0.2% higher than Q1, it is nearly 5% higher than what was seen during the second quarter of 2024. Of course, Brooklyn still has another month to go, but the fact that prices are rising in the face of rising supply and a weakening market environment hints that Brooklyn may be quietly rebounding. History shows that once that train leaves the station, it's not stopping. Quarterly Resale Condo Price Per Square Foot in Brooklyn, Q1 2015 through Q2 2025 Similar to sales prices, asking rents in Brooklyn broke through their recent ceiling. For most of 2024 and early 2025, asking rents in Brooklyn had been pushing up against the $4,000 level, but didn't break through until this year. The median asking rent this May climbed to a new high of $4,200 in April (+7.7% year-over-year), blasting past the $4,000 ceiling and signaling a hot summer ahead, especially as 7% mortgage rates push borrowing costs higher. Still, tight rental conditions could spill over into the sales market, especially at lower price points, where buyers frustrated by rising rents may start their search for a home to buy. Median Asking Rent in Brooklyn, January 2019 through May 2025 Brooklyn's spring momentum, marked by sales prices breaking $1 million and asking rents breaking $4,000, suggests a story of underlying strength. However, rising supply, flat demand, and mixed environmental signals indicate a market in transition. What seems likely to emerge this summer is a churning, segment-specific market: Be Ready: Brooklyn's market signals are mixed, but a look behind the scenes suggests a transition may be underway. If that is the case, then buyer leverage will likely fade from here. Market activity usually contracts during the slower summer months, and with supply leading demand, fewer listings in the summer mean an increase in seller leverage, even if slight. If a home comes along that ticks all the boxes, don't be afraid to make a move. Stay Focused: Although buyers have yet to make a substantial return to the market, with sales and asking rents rising, the market remains stable. The key to a summer sale remains pricing correctly and managing expectations. Yes, it will take longer to sell in the summer. Yes, there will be competition. Yes, there will be periods of little to no action. But, crucially, yes, there will be buyers. Despite signs to the contrary, Brooklyn appears poised for a shift. If you're thinking about buying or selling in the borough this summer, it pays to understand how the local supply and demand dynamics are shaping prices and perception in your area.
Independent Singapore
3 days ago
- Business
- Independent Singapore
‘Retailers, hawkers and restaurants need to survive' — KF Seetoh says Urban Hawker NYC costs less to run than Orchard Road, MBS food halls
SINGAPORE: Operations and rents in Urban Hawker in New York are way cheaper than in prime Orchard Road and Marina Bay Sands (MBS) food halls, says Makansutra founder KF Seetoh in a Facebook post on Monday night (June 2), explaining that he knows this because Makansutra was their setup consultant. Mr Seetoh said he needed to 'exhale some facts and realities' after seeing the news of how a group of retail and food and beverage (F&B) players were banding up to raise concerns over the 'sky is the limit' rents, operating costs, and manpower woes in Singapore. Pointing out that manpower is not a major issue in New York City, and people there pay market prices for food even in the Times Square and Rockefeller Centre area, where Urban Hawker is located, he said, 'Sure, taxes may be higher but it works out way better than paying ridiculous 5 figure stall rents plus a profit percentage.' ' In Singapore, selling S$8 platters. It's US$17 for fried hokkien mee in Urban Hawker and there's no entitled customers about prices there… ,' he added. Mr Seetoh said, 'Retailers, hawkers and restaurants need to survive. They pay full price for other living and business costs here, too. Who's gonna take up your shops and stalls if you happy keep cranking up that rent and operation cost machine?' warning that the current setup will only push hawkers and small operators out. 'Rethink this whole business infrastructure. Put on your crystal ball and binos and look ahead, it's bleak. Don't even talk about affordable food for the masses in the future, for a start,' he added. One commenter blamed 'insatiable landlords' who keep raising rent and making it difficult for small hawkers and retailers to survive. Another pointed out that, unlike Singapore, which charges customers for takeaway containers , 'Urban Hawker portions are American-sized, and if you need to dabao your leftovers, the containers are free.' See also Will Singapore's missing recession delay next GE? The concerns raised by Mr Seetoh echo what many in the F&B sector are going through. In February, a hawker with a vegetarian stall at Serangoon Road , who had operated for over 10 years, moved out after learning that his rent would rise to S$3,000 from just S$930 due to a new operator. He said the rent was too much, as he was only earning enough to survive. In October 2024, Singapore's monthly F&B business closures surpassed even pandemic levels , with government data showing that over 3,000 F&B outlets had closed by the end of last year . More recent figures don't offer much relief. The Department of Statistics reported a 2.8% drop in F&B sales in March this year compared to the previous year. This followed a sharper 5.7% year-on-year (YoY) drop in February. In April, government data revealed that an average of 307 F&B businesses had closed each month in 2025 due to high costs and fewer diners, up from 254 in 2024. See also Just how many 'preneurs' does Singapore need? Mr Seetoh said, 'There are more harsh realities I know about doing business in Singapore than what I tell you here. I will tell more soon.' In the comments, he added, 'Looks like we need to go back to Rent Control Act days.' /TISG Read also: Singapore bars serve non-alcoholic drinks and unique experiences to win over Gen Z amid falling alcohol consumption
Irish Times
24-05-2025
- Business
- Irish Times
Ireland's rising rents: ‘Our budget would have been €1,300 a month, there isn't even anything listed for that'
High rents may once have been considered a predominantly Dublin problem, but earlier this week new figures released by stated that average rents across the State have now surpassed €2,000 a month and are climbing faster than at any stage in the past 20 years. So what do rapidly rising rents mean for people who are renting, or trying to rent, outside the capital? How is it affecting their lives? We spoke to a number of people, living in various locations, to find out. Sophie Brady lives in Meath. She works as a special needs assistant (SNA) and her partner is a painter. She initially moved abroad a few years ago, when her landlord decided to sell the house she was living in, but moved back home a few months later. This was in April 2023 and she's been living with her boyfriend in his parents' house ever since. 'I've been on Daft multiple times a day, every day since. We've had maybe two viewings out of the thousands that I've applied for and no one else even replies to a message or an email,' she says. READ MORE 'I think people are just inundated when they list a property, that it just goes up and it's down again the next day. So you never even hear about a viewing,' she says. 'We just can't get anything.' 'I'm an SNA. I'm part-time because there is no full-time position for me in the school … our budget, stretched completely thin, would have been about €1,200 or €1,300 a month and there isn't even anything advertised or listed for that. You're looking at €1,900, minimum.' Brady says having to live with her boyfriend's family 'puts a strain on us [and] puts a strain on them. This is putting our lives on hold essentially. We're in our late 20s … we would potentially be engaged by now. We'd be starting a family if we had our own place. Genuinely we're probably about 10 years off a mortgage, if even that. We don't have people in our lives we can buy land off.' The couple have one car. 'My partner works in Trim and I work the opposite direction in Kells. I have to drop him at 6am to his job, come back home, get myself ready and then head to Kells. And then when I come home from school in the evening I have to go to Trim to collect him. The mileage we're putting on the car because we're slap bang in the middle.' Sophie Brady lives in Co Meath with her partner in his parents' house. Were it not for them, she says, she could have become homeless. Photograph: Alan Betson 'Ninety-nine per cent of the people that were my friends in school are either in Australia or America right now. And I don't want to do that. I want my kids to have Irish passports. I wanted them to be Irish citizens but we're being really left with no option,' she says. When Brady heard about the rising rent price figures released this week she says she felt 'completely let down', adding: 'There's no hope. I don't know what we're supposed to do.' 'If I hadn't got Conor [Brady's partner] and his family … I would have either ended up seeking Rape Crisis Centre help ... or I would have become homeless. And it's as simple as that. People look at homeless people on the street and think, 'Ah, drugs and alcohol. Sure they got there themselves.' It's really easy to become homeless in Ireland right now.' [ Government can kiss goodbye to its plan for lifting the rent cap Opens in new window ] Brady's reference to the Rape Crisis Centre relates to the fact that last month she spoke publicly to push for an increased sentence for her cousin, David Hamilton , who pleaded guilty to abusing her and an older relative. He was sentenced to serve seven-and-a-half years, with the final 12 months suspended. 'This is us now. We are renters, for the medium to long term.' Photograph: Mark Stedman/ Niamh McEvoy is a mother of six children. Two of her daughters are students in the University of Limerick. When her daughters first started at college they had on-campus accommodation, which she says cost €550 per month for her first daughter, increasing a year later to €575 for her second daughter. 'But that included all their bills which was manageable,' she says. 'We don't get on-campus [accommodation] any more; we're never lucky enough in the lottery,' she says. McEvoy has noticed significant differences in cost and standards in private rentals in Limerick. Last year, she explains, her daughter was living in what McEvoy says was 'substandard' accommodation. 'She came home and we were looking at her clothes [which] were mouldy. She was crying, then, one evening on the phone … because she plays camogie and the inside of her helmet had mould spores.' Now, one daughter shares a house with six other people, paying €666 per month rent, with bills on top of this. This daughter had been working part-time to try to help out with the cost, but her SUSI grant was cut by almost two-thirds because she was earning €100 a week, McEvoy says. McEvoy's other daughter shares a double room in a house with a friend. '[The landlord] is getting €900 for one room,' she says. McEvoy is feeling the financial pressure of these costs. 'We're kind of looking at, do we go in and ask the bank can they rearrange our mortgage repayments for a few months every year for us? Just to give us some breathing space.' Kevin Coleman: 'I block my eyes and hit send every month,' he says of paying €1,650 rent, exclusive of bills Kevin Coleman works in finance and will be 33 this year. He lived at home with his parents in Tipperary until last year, he says, but now lives in Cork with his girlfriend. It was important for him to get his own place 'mostly for my own sanity and mental health', he says. 'I was working from home in my own bedroom. My bedroom was my office, my sleeping area, where I watched TV, where I entertained myself, so it got to a point where 'I have to get out of here'.' He lives in a city-centre, two-bedroom apartment. 'The rent we're paying would now be regarded as quite reasonable, even though it's not reasonable at all,' he says. 'We're paying €1,650 which doesn't include bills.' 'I block my eyes and hit send every month,' he says of paying a high rent. 'The inability to be able to get a mortgage, to be able to pay for a house, that's the crux of everything, at least for us. Every so often you browse the housing, the mortgage environment and it seems so far away from us.' Coleman would love to live 'rurally, with a garden ... which would afford us that extra space if we did want to start a family. At the moment it's very restricting. There's no way you could bring a baby into this environment. In the middle of the city centre.' Coleman says some of his friends are building on their parents' properties, 'because they're able to scrape enough mortgage together to be able to build a house [and] they don't have to purchase the land.' Saving is not an option. It's next to impossible to do on a wage and paying this amount of rent — Gwen He tries to keep things in perspective and says walking around Cork city centre and seeing homeless people is very 'grounding'. 'I think, thank God, I might be paying extortionate rents but I'm able to do so for now. But owning a house, getting into a position where we can move on to the next stage of our lives just feels so alien for now.' When it comes to attitudes to renting in the longer term, Coleman says attitudes have changed through necessity. 'I think more and more people are seeing it as, 'This is my life now. This is what I'm going to pay. I'm never going to own a house. I'm never going to be in a position where I'm paying a mortgage on a house that I own.'' He adds: 'This is us now. We are renters, for the medium to long term.' Gwen* is a 35-year-old primary schoolteacher living in Wicklow. She shares a house with two of her friends. The rent on the property is €2,000. A couple of years ago a health incident meant she had to take some time out of regular employment. 'I had to take about six months off work. I went down to half pay and it meant I had to live with my parents at that time because I literally could not afford to live elsewhere,' she says. 'One of the big things I'm really struggling with now is literally saving. The concept of me owning a home is just completely by the wayside. I can't even have it in my periphery, because saving is not an option. It's next to impossible to do on a wage and paying this amount of rent.' Gwen says she has a very good landlady 'so I'm definitely one of the lucky ones. But [the rent she pays] is the average cost of many places. 'Nearly 10 years of my life I've rented and it sickens me to look back at the money I've paid in rent. That could have gone towards a mortgage, or a deposit, but it's literally just dead money that's paid for me to have a roof over my head.' [ Almost 2,000 applications for just 20 Dublin cost rental homes Opens in new window ] Gwen says that she is 'on the dating scene', explaining that when she's chatting to men and getting to know them, she'll often discover that they too are renting with friends, or living with their parents, also unable to afford their own homes. 'I'm lucky to live with two great girls, and not that we'd be having people over all the time, but it's definitely an agreement with us that we're cool with boyfriends being over … but you would imagine that a primary teacher at age 35 should be well capable of owning a home, or at least well on the way to owning a home.' We can't go anywhere because the price of rent is so high everywhere else, that we don't want to say too much to our landlord to get the work done — Helen She finds tales of rising rents 'terrifying'. 'It's getting to the stage where I'm like, is my landlady going to turn around and jack up the rent? She's well within her rights to do it. 'I can't go back to live with my parents; that's not feasible for me. I'm mid-30s now, I don't want to be living with my parents, but I've very few options other than that and it is terrifying.' Gwen says that long-term, even though she's a self-confessed 'homebird', she'll need to consider moving to a different county in search of lower rent. Helen* has two children, one of whom is disabled. She says she's lucky at the moment because her rent is relatively low compared to other people's. She's paying €800 per month, she says. Helen is a carer for her disabled child. HAP covers €80 per month of their rent, she says. She lives in the same town as her friends and family in Donegal. It's essential that she has her support network around her, she explains. But the housing estate she lives in is what she terms 'a defective-block housing estate'. Although they're renting, Helen says she and her partner have always done any jobs, such as painting, that were needed in the house. Recently she says she has started seeing mould and damp which, she says, 'are signs of mica'. She says she's afraid to push her landlord on making the necessary repairs. 'He's not doing the work for us because he's saying, 'Oh yeah I'm going to sell it.' But we can't get a mortgage, and nobody can get a mortgage for a defective block house,' she says. 'We're kind of living in fear,' she says because another house for rent in her estate, which she says is identical to the one she lives in, 'is €1,500 a month'. 'We can't go anywhere because the price of rent is so high everywhere else, that we don't want to say too much to our landlord to get the work done.' She says the landlord could get €1,500 in rent for the house 'so he's not going to do much'. 'We're not eligible for a mortgage because I'm only a carer … Social housing, there's none available in our town that is suitable for our child. 'Because of the rising rent … we're scared to question our landlord. We can't afford to move to any other house that's a four-bed.' Helen points to other costs she has encountered recently such as her car needing €900 worth of work. 'You're dealing with everyday struggles with this housing crisis still and this rental crisis.' *Names have been changed. In conversation with Jen Hogan Are rent increases skyrocketing or moderating? Two contradictory data sets on the state of Ireland's rental market were released over the past month. One told a story of skyrocketing rental prices, while the other saw rent increases moderating. But which one is accurate? The quarterly rental report was released on Monday and found rents are now rising faster than at any point over the past 20 years. [ Average monthly rent exceeds €2,000 for the first time Opens in new window ] On the other hand, the latest Residential Tenancies Board report found the growth in rents for both new and existing tenancies has moderated. The statistics are drawn only from properties advertised on the website, while the RTB data is taken from annual registrations which all landlords are required to provide. It follows that the RTB data paints a broader and more accurate picture. But perhaps this misses the point, that regardless of how fast rents are rising, the fact is that they are still rising – and particularly so outside Dublin. Lisa Kearney, president of the Institute of Professional Auctioneers and Valuers 'Limerick's rental market has seen an unprecedented surge over the past six months,' says Lisa Kearney, president of the Institute of Professional Auctioneers and Valuers and director of Rooney Auctioneers in Limerick. New tenancy rents have increased rapidly in Limerick city over the past 18 months, with the average price now €1,600 per month, according to the latest RTB/ESRI Rent Index. The report found the average price of lettings being advertised on its website in Limerick city in the first quarter of this year was €2,400. There is a growing affordability crisis in the region and a chronic shortage of rental properties, Kearney says. 'Demand is far outpacing supply, resulting in intense competition and skyrocketing rents,' she says. A number of factors are driving this crisis in the area, though Kearney says 'ironically, much of it stems from Limerick's own success'. There are a large number of multinational employers in the city such as Verizon, Eli Lilly and Johnson & Johnson, and this has created a 'boom in employment'. 'With that boom has come an influx of new residents – all in need of accommodation,' she says. 'The University of Limerick and other colleges bring a continuous flow of student renters into the market, further increasing demand,' Kearney says. Rachel Slaymaker, research officer with the ESRI, says the rental prices in Limerick city have 'come a long way up in a short time', with the price of new tenancies 'rising very rapidly to the point they are now on par with the figures for Cork city'. There is some evidence of new supply coming on to the market in Limerick, though it appears to be at a much higher price, says Slaymaker. 'We did see some new supply come into Limerick, but I think because there isn't much supply, if you get a fairly plush set of apartments come in, that will impact the average price for these kinds of new tenancies. 'When you look at the market as a whole, you probably get a different picture, but in terms of what's available now, those prices have definitely gone up.' Another outlier in the data is Co Galway, which has seen eight consecutive quarters of high growth in new tenancy rent prices, according to the RTB report. The average rent for new tenancies in Galway city in the last quarter of 2024 was €1,730, which represents a 8.4 per cent increase on the previous year. This is despite the fact that it is in a rent pressure zone (RPZ), meaning rent increases should be capped at 2 per cent per year, or the rate of inflation, whichever is lower. 'Galway city is an area that sees quite a lot of turnover in the market, partly because of the university. Whenever there's a bit more churn, there's a potential for more upward pressure on the average prices just because of the difference between the prices of what's coming in and what's coming out each time,' says Slaymaker. She also makes the point that while Galway city has been in a RPZ since 2017, the entire county of Galway was only designated as an RPZ last September, and 'you probably expect a little bit of settling-in time as people get familiar with the regulations'. Looking at the broader picture, it is clear that 'the least affordable section of the private rental sector is getting more unaffordable,' Mick Byrne, researcher at the UCD School of Social Policy, says. There are two big forces pushing against each other in the Irish rental market, says Byrne. On one hand, the RPZs are controlling rents for existing tenants, while the shortage of supply and increase in wages is driving up the cost for new tenancies. 'You could have somebody in Dublin who's living in a two-bedroom apartment and paying €1,200 a month for it, and you could have someone beside them, living in an identical apartment, who's paying €2,400 a month,' says Byrne. While we can argue the toss between rents skyrocketing and moderating, one thing is undeniable – rents are continuing to rise, particularly outside Dublin, and especially in new tenancies. - Niamh Towey
Irish Times
24-05-2025
- Business
- Irish Times
Irish politicians need to think like seasoned investors, not novice Lotto winners
Average rents have hit all-time highs, especially in cities. Has the economy gone from hot to hotter? And what are we going to do about it? In the past couple of months the average new rent nationwide exceeded €2,053 per month, up 7.3 per cent year on year, one of the fastest annual rent increases in two decades. Dublin's average rent is now about €2,540, and Cork and Limerick, although coming from a lower base, are suffering double-digit increases. This means we have too many people and not enough homes. The economy is overheating. If the country were a company it would be described as over-trading, where the top-line revenue growth is surging but behind the scenes the management is barely holding things together. Systems are overloaded, the corporation is bursting at the seams, only one or two mistakes away from meltdown. We have seen this dynamic in many start-ups, and an important skill of management in very fast-moving companies is knowing how to transition from disruptive newcomer to mature, well-managed incumbent. Growing countries experience the same economic evolution, moving from breakneck, take-off speed to cruising altitude. Ireland's problem is that we have been operating at full throttle for the past few years, with no sign of let up. READ MORE The role of good macroeconomic management is to run the economy so that we achieve the highest quality of life possible from the resources available. This means being adult enough to slow down rather than obsess about more and more growth. In terms of macro-management, Ireland had four main levers: control over interest rates and exchange rates; control over taxes and spending; control over foreign direct investment; and control over immigration and work visas. By joining the euro, we gave away control over interest rates and exchange rates. If Ireland still had the punt, our strong growth rates would have pushed both interest rates and the exchange rate upwards, cooling down demand and foreign investment. But once a country gives away its currency, that crucial aspect of control is gone. This means that the State should either raise taxes or cut spending when the economy is roaring, reduce the amount of foreign direct investment or reduce immigration to levels consistent with the capacity of the country to provide homes, education and health services. [ Average monthly rent exceeds €2,000 for the first time Opens in new window ] Providing homes, education and health services require the Government and politicians to think long-term – more like a seasoned investor and less like a novice Lotto winner. We need to think like a rich country, not a poor country. Unfortunately, we are stuck in a poor mindset, thinking that at some stage someone is going to take our money away, so we have to spend it today, just in case. As a result, we drive the economy far too hot. Instead, we should think like a rich country, saving, investing in the long term, assured in the knowledge that we are accumulating wealth and not just spending windfall income. The evidence of overheating is everywhere. We are working like never before. Unemployment has hovered around 4 to 4.5 per cent for almost three years, which indicates that practically everyone who wants a job can get one. Employment has reached a record high with 75.3 per cent of working-age (15–64) people now actually at work and making a wage – the highest rate since records began in 1998. Women are working at rates never seen before. Women's participation in the workforce hit a record 61.8 per cent. Last year alone, the labour force grew by 3.5 per cent, meaning an extra 98,000 workers – many of them new immigrants – were earning a crust. Despite this surge in workers, there are still more than 25,000 unfilled vacancies right now in the country. All this demand is pushing up wages. Average hourly earnings rose about 6 per cent year on year in late 2024. Over the five years to the end of 2024, average weekly earnings surged 24.6 per cent cumulatively, a dramatic increase, reflecting both cost-of-living adjustments and a bidding war for talent. Unions and employees have capitalised by negotiating substantial raises. A new public service pay agreement (2024–2026) awards 10.25 per cent in pay increases over 2½ years, while in January the minimum wage was increased to €13.50 per hour, boosting pay at the lower end. But even as wages have risen, people are feeling that everything is getting more and more expensive, a sentiment dramatically driven by rents, not to mention house prices themselves, which rose 9 per cent last year. The median house price nationwide reached €355,000 in 2024 (up from €327,500 in 2023). There is a sense of exhaustion, of a nation running faster and faster to stand still. Speaking of standing still, traffic is another day-to-day indicator of overheating. The volume of cars on the roads was 6 per cent higher last year than in 2023. On the M50 alone, average daily traffic reached 156,000 vehicles in 2023 – and this is rising – with toll revenues hitting record highs. The Luas carried 54 million passengers in 2024, and overall public transport journeys saw double-digit annual growth. Rush hour congestion, full buses and Darts, added to overwhelmed park-and-ride facilities, have become daily realities once again, reminiscent of the Celtic Tiger. Since the Tiger years we have had one significant change affecting our behaviour: the smartphone is amplifying the inflationary impression that everything is moving too fast and we want everything now and are frustrated by waiting. Think of the rapid expansion of what is called the 'convenience economy' including Deliveroo, Amazon Prime and rapid grocery delivery apps. All facilitated by the portable smartphone. App-based shopping now includes TikTok shop which combines the attention span of a TikToker with the credit card of a shopaholic – not a pretty or prudent combination. Just click, pay and wait for next-day delivery. It's not just the kids who are prioritising speed over price. Have you noticed the explosion of 'express' groceries? Tesco invested €80 million in 2023 to open eight new Express outlets and upgrade others. Dunnes is doing the same thing. These smaller, higher-margin stops cater to grab-and-go, maxed-out shoppers who want stuff now, and are prepared to pay for the pleasure. Everywhere we look the economy is straining at the leash. This might seem great on paper, but is it sustainable? Might it not be wiser to slow things down a bit and maybe welcome a global slowdown in investment that Trump's tariffs will bring, not because we don't want American corporate attention but simply because we don't have the capacity? For years, and with good reason, Ireland worked on expanding the economy as quickly as possible, when we had high levels of unemployment and emigration. Today, we have full employment and high levels of immigration, and this combination is putting intense pressure on the system. Maybe it's time to chill a little?
Irish Times
21-05-2025
- Business
- Irish Times
Government can kiss goodbye to its plan for lifting the rent cap
The news that rents are climbing at their fastest rate in 20 years and have passed €2,000 a month nationally should, in theory, put the kibosh on any plans to lift the cap on rents that applies in pretty much every urban area of the State. The Government has been trailing the idea since the last election, based on the premise that it will kick-start development, particularly the sort of large apartment schemes considered crucial to making a dent in the housing shortage . Even allowing for the fact that the figure of €2,000 per month contained in the Daft quarterly rental report is asking rents – for properties that are coming to market, including new builds exempt from the rent cap – the lifting of the cap now looks like a non-starter politically. The construction industry argues, rather counterintuitively, that ever-rising rents simply bolster their argument for doing away with the cap The true picture may be somewhat different. According to the most recent report from the Residential Tenancy Board, the average rent for new tenancies nationally rose by 5.5 per cent year-on-year to €1,680 in the fourth quarter of 2024. It rose by 4.6 per cent year-on-year for existing tenancies nationally to €1,440. READ MORE This is a moderation in the rate of rental inflation, it argues, but the problem for the Government is that the figure that matters is in the Daft figure as that is the one the Opposition will use to beat them up in the Dáil should they lift the cap and expose sitting tenants to significant increases. The construction industry argues, rather counterintuitively, that ever-rising rents simply bolster their argument for doing away with the cap. They are right up to a point. The reason rents are rising is because there is insufficient supply. The number of new homes commenced so far this year is eight times lower than the comparable period last year and at its lowest since 2016, according to the Department of Housing . 'I've entrepreneurial spirit in my veins' – Apprentice star Jordan Dargan Listen | 44:45 According to the industry a negative feedback loop has set in. Rent caps are discouraging investors and developers from building apartments and houses for rent and this is squeezing supply, which in turn is pushing up rents to record levels. The solution, they argue, is to remove rent caps and allow rents to move until such time as a positive feedback loop sets in. Leaving aside the possibility that capitalism is broken beyond repair, there is no doubt that the Government is in a very tricky place Of course, it won't work that way – not in the short term at least – and actively encouraging such an inflationary cycle brings us one step closer to the sort of housing market crash that some think is the only way out of the current mess. Leaving aside the possibility that capitalism is broken beyond repair, there is no doubt that the Government is in a very tricky place. The main argument for lifting rent caps – made by everyone from Taoiseach Micheál Martin downwards – is to encourage international investors into the market. Again, the argument is correct up to a point. If you want to get the sort of investment funds that are funding large developments here to invest more in the Republic, you have to offer them a better return than they can get from investing elsewhere in other assets. That means higher rents. The societal and political costs of lifting the rent cap have to be considered There does, however, come a point when the returns these funds are looking for are so expensive to the State that other sources of capital become more attractive. And this is where we find ourselves. The cost of getting money from these funds goes beyond allowing them to make large profits by charging high rents. The societal and political costs of lifting the rent cap have to be considered. The main one is the possibility of a political upheaval driven by the rise in prices and rent that will occur before the predicted moderation in rents kicks in, assuming it ever does. There is also the possibility of some sort of crash. The thing to remember about crashes is that most people don't see them coming, or else there would not be crashes. The Government would argue that it has other tools it can use to bring down the costs of construction, which in turn, should allow investors to get the returns they seek without a jump in prices. It may look like international investors have a gun to the Government's head. But that is always the wrong time to make a deal, particularly when you have the best part of €15bn in rainy day funds There are two problems here. The first is that progress in areas such as planning reform is just too slow and there is no real reason to believe that this will change. The second is that the world doesn't work that way. Investors will bank any savings rather than pass them on to tenants. Lifting the rent cap to encourage international investment is arguably the biggest gamble this Government will take. The potential for it to blow up in their faces is significant. It may look like international investors have a gun to the Government's head. But that is always the wrong time to make a deal, particularly when you have the best part of €15 billion sitting in rainy day funds. It's time to look out the window ... the rain is pouring down.
