Rents grew at slowest rate in almost eight years in last quarter

Average rents increased by 1.4 per cent, or €17 a month, in the last quarter, which was the slowest national annual growth rate in almost eight years.

The Residential Tenancies Board (RTB) published the quarterly Rent Index for the July-September period on Monday.

It showed the average rent during the period rose to €1,256, as compared with €1,239 in the same period a year earlier.

The county with the highest standardised average rent in the quarter was Dublin (€1,758 a month), while the county with the lowest monthly rents was Leitrim (€600).

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At the local electoral area level, the highest standardised average monthly rent was Stillorgan in Co Dublin (€2,319), while the lowest was Carndonagh in Co Donegal (€498).

New tenancies continued to account for about four-fifths of all registrations. Some 82.3 per cent of registered tenancies were new registrations, with 17.7 per cent being renewals.

The RTB index is based on actual rents paid on 25,193 private tenancies registered with the RTB in the quarter, which is made up of homes new to the rental sector, new tenancies in existing housing stock and renewals of existing tenancies.

This was the highest number of private tenancy registrations in a single quarter since the third quarter of 2018.

“The presence of public health restrictions on economic and social life in the second quarter of 2020 likely affected the balance of registrations between the second and third quarter as households may have put off registrations until the economy reopened in the third quarter,” noted the report.

During the period, eight counties had average monthly rents above €1,000: Cork, Dublin, Galway, Kildare, Limerick, Louth, Meath, and Wicklow. This was the first time that standardised average monthly rents in Limerick exceeded €1,000.

Year-on-year the fastest growing rent in the third quarter, by county, was seen in Waterford (7.9 per cent) and the county with the largest year-on-year decline in rents was Sligo (-6.5 per cent).

Pádraig McGoldrick, interim director of the RTB, said the effect of Covid-19 on the rental sector “can be seen once again in the third quarter of 2020”.

“There is an ongoing moderation in rental price growth which can be seen throughout the country, most notably in Dublin and the greater Dublin area,” he said.

“We know Covid-19 has impacted on both landlords and tenants and the RTB are working to support both by ensuring that information is available on new rental legislation and supports are available for those affected.”

The Institute of Professional Auctioneers & Valuers (IPAV) said the moderation in the level of growth in rents was “unsurprising” in that it was evident in the market for some time.

The group however noted that rents “are still high in the Dublin region due to the power in the marketplace of institutional landlords and vulture funds”.

IPAV chief executive Pat Davitt said: "Such investors are keeping rents elevated in the Dublin region where today's index shows rent for a one-bedroom apartment costs nearly €300 a month more than an apartment with three or more bedrooms outside Dublin.

“Such investors have been facilitated by very attractive tax incentives and are now acquiring almost monopolistic power in the Dublin market, with the ability to use the highest possible comparables when setting new rents.”