THE LATEST DAFT.IE report has said that the rental market in Ireland has “emerged slightly from its worst shortages of the post-lockdown period”.
In its report for the third quarter of 2023, Daft.ie found that market rents rose by an average of 1.8% nationwide when compared to the second quarter of 2023.
However, this quarterly increase was just 0.4% in Dublin, while year-on-year rents in Dublin have increased by 4.3% – the lowest inflation rate in two years.
Daft.ie said the stable rents seen in Dublin are the result of improved supply.
On 1 November, there were almost 1,800 homes available to rent nationwide, compared to fewer than 1,100 on the same date a year ago.
Of the increase of almost 700 homes, Dublin accounted for over 600 of those.
The number of homes available to rent at any one time fell to record lows in 2022 but there has been an improvement since the second quarter of this year, driven by an improvement in availability in Dublin.
It’s the third quarter in a row where there has been a noticeable difference between trends in Dublin and elsewhere.
Across Leinster (outside of Dublin) rents increased by 1.8% on average in Q3 of this year when compared to the previous quarter, but rents are up 7.8% when compared to the previous year.
In Munster, there’s been a 3% quarterly increase in market rents, the eight time in 12 quarters where rents have risen by 3% or more.
The annual inflation rate has risen by 13%, the highest rate in two years.
Across Connacth and Ulster, rents have increased by 2.3% in Q3 of this year when compared to Q2.
This follows a jump of 6% in Q2 of this year and is the thirteenth quarterly increase in a row, while rents are up 16.1% year-on-year.
All four major cities outside of Dublin – Cork, Limerick, Galway, and Waterford – saw significant quarterly increases in rent.
In Cork City, there was a 5% quarterly increase, a 7.2% increase in Limerick City, a 6.2% rise in Galway City, and a 5.4% jump in Waterford City.
The average market rent nationwide in the third quarter of this year was just under €1,825 per month.
In late 2011, this figure was €765 per month.
Ronan Lyons, author of the report and associate professor in economics at Trinity College Dublin, said that a “significant pipeline” of new rental homes has emerged in Dublin.
He added that this “steady flow of homes, especially since 2022, has eased the very tight market conditions that had emerged after Covid-19 lockdowns”.
“While most of the rest of the country is still experiencing double-digit inflation, market rents in Dublin are now close to static,” said Lyons.
“High construction costs – and uncertain financing – has meant that viability is a challenge outside the capital.
“But the solution to high rents remains the construction of large volumes of new rental housing around the country.”
Lyons added that “it is likely policy supports will be needed given these “viability challenges”.
Note: Journal Media Ltd has shareholders in common with Daft.ie publisher Distilled Media Group.
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