By Cillian Sherlock, PA
Market rents have risen by 11.7 per cent in the 12 months since March 2022, according to the latest report from property website Daft.ie.
However, the quarterly increase has slowed to its lowest level since 2020, with market rents in the first three months of the year up just 1 per cent on average compared with the previous quarter.
The average market rent nationwide between January and March was €1,750 per month, compared with €1,387 in the first quarter of 2020 and a low of just €765 per month seen in late 2011.
The upward trend in market rents around the country is driven by extraordinary shortages in the availability of rental accommodation.
Nationwide, there were just 959 homes available to rent on May 1st.
While this is up 13 per cent on the same date last year, it still represents one of the three lowest totals for availability at the start of the month in a series that extends back to the start of 2006.
The availability of rental homes is approximately one quarter the average level of availability during 2015-2019.
Daft identified significant regional differences in how rents changed in the first quarter.
In Dublin, rents rose by 0.5 per cent quarter-on-quarter, the same rate seen in the rest of Leinster.
However, in the four other cities, rents fell in the first quarter by 1.8 per cent on average.
In the case of Cork city, this is the first time in almost a decade that rents have not risen quarter-on-quarter.
In Munster, Connacht and Ulster rents continued to rise strongly outside of cities, by 3.8 per cent on average in quarter one of 2023.
Outside of open market rents, the report also includes an index of rents paid by sitting tenants, rather than movers, using a bespoke survey of thousands of tenants.
It shows that, on average, rents paid by sitting tenants have increased by 4.1 per cent over the last 12 months, with bigger percentage increases outside Dublin than in the capital.
Since the introduction of Rent Pressure Zones in 2016, rents of sitting tenants have increased by roughly 20 per cent on average, compared with an average increase in open-market rents of three quarters over the same period.
The report’s author, Trinity College Dublin associate professor of economics Ronan Lyons said it offers “some crumbs of comfort for those of us gravely concerned about the health of Ireland’s rental market”.
“For over a decade now, the rental market has been characterised by worsening availability and, as a consequence, higher and higher rents.”
He added: “The private rental market has been under increasing stress over the last two years, as first society reopened after the Covid-19 pandemic and then the war in Ukraine led to a refugee crisis.
“There are some signs that, if things are not getting better, then they are not getting much worse.
“Availability of homes to rent has stopped falling, albeit at extremely low levels, while the quarterly change in rents seen January to March was far smaller than the average increase seen in 2021 and 2022.
“Nonetheless, the solution to Ireland’s rental housing shortage requires significant action by policymakers.
“The number of rental homes coming on to the market in newly built developments has held up in recent months but is likely to reduce in the quarters ahead, unless issues around planning certainty and viability are addressed.
“Ultimately, policymakers must have a clear plan on how tens of thousands of new rental homes will be delivered this decade in all major towns and cities.”