Rents rose by an average of more than 7 per cent in the second quarter of 2024 compared with the same period last year, according to a report by Daft.ie.
The report also shows market rents rose by an average of 2 per cent compared with the first three months of the year. The move marks the 14th consecutive quarter in which rents nationwide have increased and the 45th time in the last 48 quarters.
The average open-market rent nationwide in the second quarter of the year was €1,922 per month, up 7.3 per cent year on year and 41 per cent higher than before the outbreak of the Covid-19 pandemic.
Inflation in market rents remains significantly lower in Dublin than elsewhere in the country. In the capital, rents in the second quarter of the year were 3.5 per cent higher than a year earlier at and average of €2,427, while elsewhere in the State, they were on average 10.6 per cent higher.
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Market rents rose particularly sharply in Limerick City (up 21 per cent year-on-year) but Galway (13.3 per cent) and Cork (11.9 per cent) also saw double-digit increases while Waterford, at 9.9 per cent, was just shy of it.
Outside the cities, the rate of increase was similar, on average, between 9.3 per cent in Munster and 10.5 per cent in Connacht-Ulster.
As has consistently been the case in recent years, availability on the rental market remains extremely tight. On August 1st, there were just over 2,200 homes available to rent across the State, effectively unchanged on the same date a year previously and half the 2015-2019 average of 4,400.
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Ronan Lyons, associate professor of economics at Trinity College Dublin and author of the report, said the gains made in terms of availability in Dublin in recent years have “run out of steam”.
The report said there were fewer than 1,350 homes on the market in the capital on August 1st. “Sixteen months of improving availability are over,” he said.
Outside Dublin, however, he said the picture “had never been quite as optimistic to begin with”.
“Almost all of the new rental supply was confined to the capital, because of high construction costs,” he said. “Between 2016 and 2019, there was an average of just over 2,500 rental homes available at any point in time, excluding Dublin.”
That total fell to below 1,000 during 2022 and 2023 and “remains stuck there”. As of the start of August, there were fewer than 900 homes available to rent across the country, excluding Dublin.
Across Cork, Galway, Limerick and Waterford cities combined, there were just 150 homes available to rent at the start of this month.
“Where availability goes, affordability follows: supply is the single most important determinant of rental level,” said Mr Lyons. “When supply is tight, rents are pulled up. We can see this in the path of rents in Dublin compared to the other cities over the last two years.”
In the past two years, open-market rents in Dublin have increased by a total of 12 per cent, while in the other cities they have increased by twice as much, the report showed.
“This marks a continuation of a trend noticeable since the pandemic: rents in Dublin are up 26 per cent, while rents in the other cities are up an average of 52 per cent,” said Mr Lyons.
“Ideally, more than a decade into a rental housing shortage, we would be talking about the gradual spread of the solution, rather than a return to the core problem. The solution is new supply of market rental homes, in large volumes, in each and every rental market in the country.”
He added that it was “most unfortunate” that pro-rental policies were scrapped “just as the evidence was starting to emerge of their success”.
“Reintroducing pro-rental policies is, however, not a discretionary policy option,” he said. “It is an imperative choice if Ireland is to have some semblance of a healthy housing system by the end of the decade.”
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