In a tale of two rental markets, the Covid pandemic has sent Dublin rents down while the rest of the country has seen prices rise seven per cent on last year.
According to the Daft.ie rental report for the first three months of 2021, the rise for renters outside of Dublin means they are now handing over an extra €900 per year.
In Cork, Galway and Limerick cities, rents are six per cent higher than a year previously, while in Waterford they are 8.3 per cent higher. Outside the five main cities, rents are up 7.3 per cent year-on-year.
It comes as supply has contracted outside of the capital, with just 1,150 rental units available on May 1st — down one third from the same date in 2020.
Meanwhile in Dublin, supply is up 20 per cent, with just under 2,500 homes available to rent in the capital at the start of May.
Average rents, and year-on-year change, for quarter one of 2021:
- Dublin: €2,007, down 3.2 per cent;
- Cork city: €1,483, up 6.3 per cent;
- Galway city: €1,400, up 6.1 per cent;
- Limerick city: €1,293, up 6.3 per cent.
Commenting on the rental report, economist at Trinity College Dublin Ronan Lyons said: “The impact of Covid-19 on Ireland’s rental market was largely to send Dublin and the rest of the country in different directions.
“In Dublin, additional supply moving over from the short-term lettings market coupled with a temporary halt to people moving to the city pushed rents down. Elsewhere, lockdown ground the rental market to a halt, with fewer listings pushing rents further up.
“As normal life resumes over the coming months, these differences are likely to fade and more long-standing problems – in particular chronic undersupply of new rental homes – will be the main driver, within a broader context of economic and population growth.”
Largest quarterly gain
Inclusive of both Dublin and the rest of the country, average national rents experienced the largest quarterly gain since mid-2018.
Rents nationally in the first three months of the year, at an average of €1,443 per month, were on average 2.1 per cent higher than in the final three months of 2020.
The average monthly rent was up 1.7 per cent year-on-year and up almost 95 per cent from a low of €742 per month seen in late 2011.
In Dublin, while rents did rise 1.2 per cent in the first three months of 2021, they remain 3.2 per cent lower than a year previously, following falls in the second and fourth quarters of 2020. Over the past year, city centre rents have seen a drop of 6.5 per cent.
Outside of Dublin, the seven per cent yearly rent increase was compounded by a 2.9 per cent increase in the first quarter of 2021.
The Institute of Professional Auctioneers and Valuers, IPAV, said the Daft.ie report highlighted that repaying a mortgage on a three-bedroom home was only more expensive than paying rent in two areas of the country — Dublin 4 and 6.
“In every other area of the country, including Dublin, it would be cheaper, close to half the cost in many cases, to service a mortgage than paying rent on the same property — if one could acquire a mortgage,” IPAV said.
Pat Davitt, IPAV chief executive said: “These figures illustrate the travesty of the situation for young people in particular, many of whom are now approaching middle age and who cannot acquire their own homes.
“The solutions thus far are clearly not working and something very different needs to be done to get more affordable homes built. It requires a whole of Government approach, often talked about but not yet implemented.”