Asking prices for rents move above €2,000 for first time in first quarter – report
Average asking prices for rents nationally rose by 3.4% between January and March of this year, going above €2,000 for the first time, according to the latest report from property website Daft.
The findings indicate the latest increase is one of the largest in any three months in the last two decades, with average prices reaching €2,053 per month.
The figure is up from a low of €765 in 2011, and 48% higher than just before the outbreak of Covid-19.
At €2,540 Dublin has the highest average rents, with prices for the capital increasing by 5.8% in the year to March.
Meanwhile, average rents in cities of Limerick (increased by 20% to €2,405), Cork (increased by 13.6% to €2,213), Galway (increased by 12.6% to €2,304), and Waterford (increased by 9.9% to €1,735) all saw significant increases year-on-year in March.
Outside of the major cities, rents in Leinster and Connacht-Ulster were up just over 5% year-on-year, while rents in Munster were 11.5% higher.
There were just over 2,300 homes available to rent across the country on the Daft.ie portal at the beginning of May, which was down 14% on the same time last year and was the third lowest total for May in 20 years.
Commenting on the findings, Professor of Economics at Trinity College Dublin Ronan Lyons said the “sustained increases in rents in the open market are being driven by an acute and worsening shortage of rental housing”.
“Unfortunately, changes made to rent controls in 2021 dramatically reduced the ability of Ireland’s rental sector to attract the capital needed for new supply, the ultimate remedy for the shortage.
“The opportunity exists for the Government to reform those controls and facilitate the emergence of a new pipeline of rental homes. Nonetheless, further supports will be needed to encourage new rental supply outside of the Greater Dublin Area,” Prof Lyons said.
Speaking on RTÉ’s Morning Ireland, Prof Lyons added that some rents are now around 160% higher now than they were a little over 10 years ago.
“For those in the open market, rents have increased quite starkly, almost 50% in the last five years since the outbreak of the Covid pandemic and about 160% higher than that low a little over 10 years ago.”
Prof Lyons explained that these increases apply only to new tenants.
Sitting tenants have a slightly different path, largely because of rent pressure zones, he added.
Prof Lyons pointed out that open market rents in Limerick have increased by 20% year on year.
Although this is an extreme case, you can see significant increases in rents around the country, Mr Lyons said.
“It’s 10% in some cases, and like in Carlow and Kilkenny, it’s smaller in others, maybe four or 5% but still, those four or 5% increases in places like Cavan or Monaghan or Donegal come on top of very large increases over the last couple of years.”
Prof Lyons added that a shortage of rental properties is adding to the problem.