Rents across Ireland climbed at their lowest rate in three years in the first quarter and were up just 1 per cent when compared with the last three months of 2022, offering “crumbs of comfort” to a sector under extreme stress.
The year-on-year increase, however, was almost 12 per cent higher with the average rent now standing at €1,750 compared with less than €1,400 in the first quarter of 2020 and a low of just €765 per month seen in late 2011, according to the latest rental report published by property website Daft.ie
There were significant regional differences in how rents changed in the first quarter.
In Dublin, rents rose by 0.5 per cent while in other large urban centres rents fell by an average of 1.8 per cent – the fall was the first time in almost a decade that rents have not risen quarter-on-quarter in Cork city.
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In Munster, Connacht and Ulster – outside the cities – rents continued to rise strongly in the first quarter of this year by 3.8 per cent on average. As in recent quarters, the upward trend in market rents around the country is driven by extraordinary shortages in the availability of accommodation with just 959 homes available to rent across the State on May 1st.
That represented a 13 per cent increase on the same date last year but still represented one of the three lowest totals for availability at the start of the month in a series that extends back to the start of 2006. The availability of rental homes is about one-quarter the average level of availability during 2015-2019. While the top-line figures refer to open market rents, the report also includes an index of rents paid by sitting tenants, rather than movers, using a bespoke survey of tenants.
It shows that, on average, rents paid by sitting tenants have increased by 4.1 per cent over the past 12 months, with bigger percentage increases outside Dublin than in the capital.
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Since the introduction of Rent Pressure Zones in 2016, rents of sitting tenants have increased by roughly 20 per cent on average, compared to an average increase in open-market rents of three-quarters over the same period.
The author of the report, Ronan Lyons, associate professor of economics at Trinity College Dublin, said the rental market has been under “increasing stress over the last two years, as first society reopened after the Covid-19 pandemic and then the war in Ukraine led to a refugee crisis”.
He said there were now “some signs that, if things are not getting better, then they are not getting much worse. Availability of homes to rent has stopped falling, albeit at extremely low levels, while the quarterly change in rents recorded in January to March was smaller than the average increase seen in 2021 and 2022.”
He suggested that the fresh figures “offer some crumbs of comfort for those of us gravely concerned about the health of Ireland’s rental market for over a decade. Now the rental market has been characterised by worsening availability, and as a consequence, higher and higher rents.”
