Rents are rising at a faster rate than at any time since the crash, according to property website Daft.ie.
The group’s latest quarterly report also shows the supply of rental homes is at its lowest point in almost a decade. The findings come ahead of new Government measures to control the market and protect tenants from excessive price hikes.
According to Daft.ie, the national average rent between July and September was €964, compared to €882 a year previously, equating to an inflation rate of 9.3 per cent.
For a second quarter in a row, the increase was driven by trends outside the capital.
In Dublin, where the average rent is now €1,409, annual inflation is running at 8.9 per cent, down from 15 per cent in middle of last year, whereas outside Dublin, rental inflation stands at 9.7 per cent, up from 5 per cent in mid-2014.
The highest rates of inflation are in the cities outside Dublin, with rents 13.5 per cent higher than a year ago in Cork and 12.2 per cent higher in Galway. In Limerick and Waterford cities, inflation stands at 11.4 per cent and 9.6 per cent respectively.
Supply issues
The report also noted that supply of rental homes – recorded at just more than 4,000 on November 1st – was the lowest on record, eclipsing the previous low of 4,300, recorded in early 2007. While supply has been tight in Dublin for more than two years, other parts are now witnessing “dramatic falls”, the report said.
It said there were 40 per cent fewer homes to rent in Munster at the end of November than a year previously.
Trinity College economist and author of the Daft report Ronan Lyons suggested the market may have reacted to talk of rental controls, citing quarterly jumps of 7 per cent and 6 per cent in Cork and Galway as unprecedented.
“Ultimately, while controls on rent increases may help those at risk of becoming homeless, they do nothing to help those already homeless,” Mr Lyons said. “The much more pressing issue that needs to be addressed is the lack of supply, which ultimately depends on the cost of construction.”
After months of wrangling, the Government announced measures aimed reforming the private rental market earlier this month. The so-called rent certainty measures include increasing the rent-review period from one to two years, increased notice periods for rent reviews and a raft of greater protections for tenants.
Control measures
They stopped short, however, of linking rent increases to the Consumer Price Index, a measure previously supported by Minister for the Environment
Alan Kelly
. Homeless charities gave the measures a guarded welcome but the umbrella group for landlords, the Irish Property Owners’ Association, warned the controls would push many out of the market.
