'This can only be addressed by significantly increased supply': Cork rents climb further 

Rents in Cork city in the second quarter of this year were an average of 11.8% higher than the same period last year, while nationally rents were an average of 12.6% higher.

The average market rent between April and June was €1,670 pm in Cork city, and €1618 nationwide, according to the latest report from Daft.ie.

The annual inflation rate of 12.6% is the highest recorded in the Daft.ie report since its launch in 2006, surpassing the previous peak of 11.8% in late 2016.

Nationwide, there were just 716 homes available to rent at the beginning of August, down from almost 2,500 a year ago, and another new all-time low.

As has been consistently the case over much of the past decade, the increase in market rents around the country was driven by tightening in rental availability.

However, the scarcity of rental homes has been unprecedented over the past year, the report added. Compared to 2009, rental availability has fallen by 97% nationwide.

The report includes an analysis of 75 multi-unit rental developments, which are estimated to have added almost 1,000 new rental homes in the last nine months, or roughly 25 new homes per week.

Of the 7,500 homes in these developments, almost 95% are occupied, based on publicly available information.

Pipeline

Also in the report is an analysis of figures provided by Cortland Consult on the pipeline of new rental homes.

Over the past year, the pipeline has increased by approximately 23,000, representing an increase of 13,000 under construction and 28,000 for which a planning application has been submitted – as well as a decrease of 17,500 at pre-planning stage.

The stock of rental homes for which planning has been granted but yet to start construction remains steady at 43,000.

 “A resurgent economy over the last year has accentuated the chronic shortage of rental housing in Ireland,” Ronan Lyons, associate professor of economics at Trinity College Dublin and author of the Daft report, said.

“While the professional rental sector has added over 7,000 new rental homes in the last five years, this is small relative to the fall of 30,000 in rental listings each year in the traditional rental sector in the same period, or the fall of 100,000 listings per year since 2012.

“The shortage of rental accommodation translates directly into higher market rents, and this can only be addressed by significantly increased supply.

“While there are almost 115,000 proposed rental homes in the pipeline, these are concentrated in the Dublin area.

“Further, while nearly 23,000 are under construction, the remainder are earlier in the process and the growth of legal challenges to new developments presents a threat to addressing the rental scarcity.”