A study of the rents paid by sitting and new tenants last year found that existing tenants were paying 15.2 per cent less than did those who had just moved into the new homes, when controlling for different property sizes and types.
The study, by the Economic and Social Research Institute (ESRI), found a “huge variation” in the share of tenancies that were new or existing in different parts of Dublin, with new tenancies being particularly high in the south centre of the city.
The number of new tenancies each year has been trending downwards since 2010, so that new tenancies represent an increasingly small portion of the overall private rental sector, according to the report.
Relatively large gaps were found between the rents being paid by new and existing tenants in Galway, Limerick and Waterford, with more rents at the higher ends of the spectrum being found for new rentals in each of these cities.
Mean rents broken down by the number of bedrooms in a property showed that in the second and third quarters of 2022 one bedroom rents in Dublin city were €1,411 per month for new tenants compared to €1,251 for existing tenants, a difference of 12.8 per cent.
During the same period, the mean monthly rent on a three-bedroom property was €2,469 for new tenants and €2,033 for existing tenants, a difference of 21.5 per cent.
The equivalent figures for Cork City were €1,067 and €928 for a one bedroom property, a difference of 15 per cent, and €1,524 and €1,333 for a three-bedroom property, a difference of 14.3 per cent.
In Waterford City new tenants were paying 26.1 per cent more for a three-bedroom property (€1,164) than existing tenants were, while in Galway City the difference was 24.9 per cent, with new tenants paying €1,598.
The ESRI study analysed almost 100,000 tenancies from the Residential Tenancies Board’s (RTB) administrative tenancy registers for the second and third quarters of 2022. From April of that year, all landlords were required to annually register a tenancy within one month of it commencing.
The study found that one-bedroom properties made up a higher share of new as against existing tenancies, while three-bedroom properties, and those in rural areas, made up a lower share of new tenancies.
Apartments and flats made up a higher share of new tenancies than was the case with semidetached and terraced properties, and the average number of tenants was slightly higher (1.86) in new as against existing (1.81) tenancies.
The figures on the proportion of tenancies that had begun in the previous year indicated there was a particular high churn of tenancies in Dublin, with such tenancies accounting for just under fifty per cent of the total in Dublin 2.
Without accounting for differences in property type and size, the data showed that one in five existing tenancies in Dublin were at rents of more than €2,000 per month, while more than two-fifths of new tenancies were at rents above that figure.
The largest gaps in the rents being paid by existing and new tenants were found in the northwest and west of the State, and in parts of the midlands.
“These findings likely reflect the rapid rental inflation in new tenancies observed in more rural and less traditional rental markets in recent quarters, as well as less frequent turnover of properties in many of these areas,” said the report.
Data from the Survey on Income and Living Conditions shows that 18 per cent of Irish households were living in private rented accommodation in 2021, with the sector playing an increasing important role in housing overall in recent times.
Declining rates of home ownership, and a slowdown in the construction and acquisition of social housing have been cited as contributory factors, according to the report.
RTB data shows new tenancy registrations have been trending downwards since 2008, with a particularly sharp fall occurring in 2020.
The trend is likely being driven by a number of interlinking factors, according to the report, including supply shortage, properties leaving the rental sector, and tenants remaining in properties for longer than has historically been the case.
Reasons for tenants staying in situ for longer may include the difficulties first-time buyers have in making purchases and the increased use of the private rental sector to house tenants receiving the Housing Assistance Payment and other social supports.
New vs Existing Rental Tenancies in Ireland: a first look at annual registrations microdata, is by Rachel Slaymaker and Eva Shiel.
