Rent inflation ‘stabilises’ in Dublin, Daft report shows

Rents continued to rise nationally in the second quarter but “stabilised” in Dublin, according to the new data from the Daft.ie website.

The company’s latest quarterly rent report, which is based on asking prices on its website, indicated that market rents rose by an average of 2.4 per cent between April and June compared with the first three months of the year.

Compared to a year ago rents rose 10.7 per cent to stand at just under €1,800 per month on average, it said. This compares to €1,387 in the first quarter of 2020 and a low of just €765 per month seen in late 2011.

While Dublin had the highest average rate, at €2,344 per month, the rate of increase in the capital moderated to just 0.3 per cent, which Daft described as “the second quarter in a row of muted increases”.

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Outside Dublin the average increase between March and June was 4.3 per cent, the second largest quarterly increase recorded outside the capital since the start of the Daft Report in 2006. Having fallen in the first quarter, market rents rose in each of the other main cities, Cork, Limerick, Galway and Waterford, it said.

“The figures in this latest rental market report indicate something of a split in market conditions. In Dublin the construction of new rental housing – together perhaps with the effect of lay-offs in some larger employers – has led to an easing of pressure in the open market,” the report’s author, economist Ronan Lyons, said. “Outside the capital, however, the lack of new rental homes means that the imbalance between supply and demand is still there.”

Daft’s report noted that availability nationally remains “extremely tight” compared to other years, with fewer than 1,200 homes available to rent nationwide on its website as of August 1st. While the supply of rental homes has increased marginally in recent months, it said the “extraordinary shortage” of rental accommodation continues.

It highlighted that Dublin had been the focal point for almost all new rental homes built in the last five years. About 13,000 new rental homes have come on the market in the capital in the last five years – and at a growing rate: just a few hundred in 2018, rising to roughly 2,000 per year in 2019-2021 and even more since.

“Conditions remain far from benign for prospective tenants but the mismatch between strong demand and weak supply is not as stark as in recent quarters,” Mr Lyons said.

He said in Connacht-Ulster rents jumped over 6 per cent in just three months, pushing the annual rate of inflation to its highest level ever recorded (21.2 per cent) in a series stretching back to early 2006.

The average rent in Cork city was €1,793, up 7.4 per cent in annual terms. In Galway city it was €1,867, up 12.2 per cent year-on-year. This was followed by Limerick city (€1,738, up 11.5 per cent) and Waterford city (€1,471, up 12.1 per cent)