Rents are now climbing faster than at any point over the past 20 years with the national monthly average between January and March surpassing €2,000 for the first time, new figures suggest.
According to the Daft.ie quarterly rental report, the cost of renting increased by an average of 3.4 per cent in the first three months of 2025 with the increases taking the monthly average open-market rent to €2,053.
That compares to a low of just €765 in 2011 and represents a 48 per cent jump since just before the outbreak of Covid-19 in early 2020.
In Dublin, the increase was 2.4 per cent in the first quarter, the largest rise since 2022 as the pipeline of new rental properties dried up.
The author of the report, economist and Trinity College professor Ronan Lyons, once again noted a supply crunch across the rental sector as the root cause of the price spike. He suggested that Government interventions in recent years that were aimed at easing the housing crisis may have, in fact, exacerbated the scale of the problem.
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There were just more than 2,300 homes available to rent nationally on May 1st, down 14 per cent year-on-year and the third lowest total for May in 20 years, the report suggests.
The figure also represents close to half the 2015-2019 average for availability of homes to rent.
Mr Lyons said the sustained increases in rents in the open market “are being driven by an acute and worsening shortage of rental housing”.
He added that 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”.
He stressed that 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”.
After a period of subdued pressure on rents in Dublin, due to a large volume of new supply coming on to the market, inflation in the capital is converging with rates elsewhere.
The year-on-year increase up to the end of March in Dublin was put at 5.8 per cent with the average in the rest of the country said to be 8.6 per cent.
In Cork and Galway cities, rents were up 13.6 per cent and 12.6 per cent respectively while the rate of increase in Waterford was 9.9 per cent year-on-year. Limerick was where the largest increases were recorded, climbing by more than 20 per cent year-on-year.
Outside the major cities, rents in Leinster and Connacht-Ulster were up just over 5 per cent on an annual basis, while rents in Munster were 11.5 per cent higher.
Mr Lyons also noted a dramatic rise in interest rates in recent years, which he said had impacted the supply of second-hand homes and caused existing homeowners to fix for the medium term. He said that situation would “pass” but only slowly.
“The ultimate solution remains unchanged from that which was needed a decade ago,” he continued. “A lot more homes need to be built, so that the country’s housing is adequate for its households.”
However, he said the entire housing system “seems reliant on Government funding and subsidies, an unfortunate circumstance at the best of times but of greater concern given wider economic uncertainties.
“Meanwhile, changes in the wider regulatory set-up seems to have delivered confusion, rather than clarity, about how the country will build the homes it needs.”
