Average asking rents in the Republic are now twice what they were at the peak of the Celtic Tiger period and 50 per cent higher than the rate that prevailed just before the pandemic.
That is according to the latest rental report from property website Daft which indicated there were just 2,300 homes available to rent nationally on August 1st, reflecting the scarcity of supply.
This was down 14 per cent year on year and close to half the 2015-2019 average.
Daft’s report said the cost of renting increased by an average of 1.6 per cent between April and June with the increases taking the average open-market rent to €2,053 per month.
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That compares to a low of just €765 in 2011. It was also 51 per cent higher than before the outbreak of Covid-19.
The second-quarter increase in rents represented the 18th consecutive quarter of rising rents.
The annualised increase was put at 6.9 per cent.
However, with the volume of new supply slowing considerably, inflation in Dublin – at 6.5 per cent – is now close to the average seen in the rest of the country, Daft said, while the average open-market rent in the capital was €2,583.
There was also significant pressure on would-be renters in the State’s other cities.
In Galway city, rents were up 8.5 per cent year on year with the average rent put at €2,295, while in Cork City they increased by 11.8 per cent with the average rent put at €2,241.
Inflation was even greater in Waterford city (up 12.5 per cent) and, as has consistently been the case in recent quarters, Limerick city saw the highest inflation, at 14.9 per cent.
“As has consistently been the case over the past 15 years, the substantial increases in rents are being driven by extreme scarcity of rental housing, relative to underlying need,” said Ronan Lyons, associate professor of economics at Trinity College Dublin and author of the report.
“Since the last report, the Government has moved to relax some of the strictest aspects of Ireland’s rent controls,” he said.
Changes to the State’s system of rent pressure zones (RPZs), announced earlier this year, means landlords will be able to reset rents at the going market rate when a tenant leaves.
“While this is likely to help boost investment in new rental supply, those changes will not take effect until next year,” Mr Lyons said.
“Further, Ireland’s lengthy planning process means that it will be a number of years before any increase in supply is meaningful enough to start addressing the large deficit of rental housing in the country.”
Meanwhile, a separate report from insurance firm Chill highlighted the growing unaffordability in the buyers’ market.
It estimated that first-time buyers in Dublin now require a six-figure income to qualify for a mortgage.
The analysis, which compared Central Statistics Office data on median first-time-buyer home prices with local incomes, shows that a single applicant in Dublin would need to earn €103,500 to qualify under Central Bank mortgage rules.
The regulator’s rules limit first-time buyers to borrowing a maximum of four times their annual income.
The company noted the median (or mid-ranged) income in Dublin was €47,873, which left an income shortfall of €55,627.
“The figures underline the scale of the affordability crisis,” the company said.
While Dublin tops the table, other Leinster counties were also found to be high in the unaffordability charts, with Wicklow and Kildare also requiring salaries of close to €100,000.
At the other end of the scale, counties Roscommon, Longford and Donegal were found to be the most affordable – but even in these counties, salaries of about €50,000 a year were needed.
