Rental costs rise at many times the overall inflation rate
Landlords continue to hike rents at many times the overall rate of inflation despite the housing crisis, but the costs of insuring a car, after consecutive years of price increases, fell sharply in the past year, official figures suggest.
The CSO’s latest Consumer Price Index continues to show that annual inflation remains modest in Ireland — its weighted basket of goods and services rose last month by only 1.1% from June 2018.
Its detailed figures suggest a more mixed picture across the economy, with a number of key goods and services, including rental costs, rising sharply.
Private landlord rents rose in June from May and showed an increase in the year of 5.5% while local authority rents also climbed sharply, by 5.8%.
The figures suggest that mortgage banks increased the costs of their variable and fixed rate loans by 2.4% in the year, even at a time when the prospects of the ECB cutting rates have risen significantly.
The broad area of housing, water, electricity, gas, and fuels rose by 4% in the year, reflecting “higher rents and mortgage interest repayments in addition to an increase in the price of electricity and gas”, said the CSO. By sector, there were also significant annual increases.
Restaurants and cafes increased prices by 3.9% in the year; pubs by 2.7%; and hotels by 4.2%, according to the CSO.
The survey of 51,000 prices also shows some significant price falls. The costs of insuring a car have fallen by 4.7% in the year, while motorbike premiums have dropped by 12.5%. Clothing costs edged lower by 0.5% and footwear costs fell by just over 3%.
Economist Alan McQuaid said that inflation remains “muted”.
“Oil prices will be critical in determining the headline inflation outlook over the next 12 months or so, but they remain volatile and hard to predict,” he said.
“However, with the economy continuing to grow strongly, the more immediate worry on the domestic inflation front centres around increased wage demands, particularly in the public service.”
