People living in Dublin City are now spending as much as 55% of their take-home pay on rent.
That’s according to new figures from Sherry FitzGerald, released this week.
They show just how expensive it is to rent in the capital with the rise in rents in recent years outpacing earnings growth over the same period.
By contrast Limerick City was the cheapest urban centre to rent in with dwellers giving up just 30% of their after-tax income on their home.
When rent is calculated as a percentage of income Dublin was the third most expensive city in the world to rent in afer London (Kensington and Chelsea) at 85% and Manhattan at 60%.
Since the end of 2012 the rent-to-income ratio, or the amount of the average income that goes on rent, has been rising steadily, but touched 55% for the first time in the second quarter of this year according to Sherry FitzGerald.
This means that for every €100 in after-tax income earned, €55 goes on rent. So a single person on a salary of €35,000, will have take home income of €2,405, of which €1,322 will go on rent.
Typically financial experts recommend that a person keeps their housing costs to 30 per cent of their net income, When housing costs go above this level, it starts to impact on a household’s ability to save and cover other costs.
Back in 2008, as the Celtic Tiger bid farewell, Dublin dwellers were spending about 53% of their disposable income on rent, in excess of the national average of about 40%. However, the ratio tapered thereafter, but has been rising steadily since 2012 and the latest figure represents a new high.
Nationally the income to rent ratio now stands at 41% while it varied in areas such as Cork City (37%), Kildare (40%), Galway (41%) and Wicklow (42%).