Rents edge up in June as house prices fall

Report shows bounce in supply as easing of restrictions reopens property markets

The cost of renting a property continued to rise in June. Photograph: Bryan O’Brien

The cost of renting a property continued to rise in June. Photograph: Bryan O’Brien

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Rents rose in June while house prices declined, despite a substantial increase in activity in the property market, according to a report from property website Daft.ie.

Rents rose just 0.2 per cent in the 12 months to June with the average monthly listed rent now €1,402.

The price of homes to buy was 3.3 per cent lower in June than the same month a year ago, a reversal from a marginal gain in May. The average listed sale price across the State is €253,868.

Trinity College Dublin economist Ronan Lyons noted that significantly more homes were listed for rent in June this year compared with last year.

“The concern remains that policymakers see this as the underlying problem solved. While the new Government may want to favour the construction of owner-occupied homes, the fundamental shortages are in the social and market rental segments and it is those segments that must be the focus for policymakers over the coming years,” he said.

Landlords said the release of student accommodation previously earmarked for the summer tourist season and the decision of some multinationals to facilitate working from home had resulted in more rental accommodation becoming available.

An increase in the number of properties available for rent was to be expected, Irish Property Owners Association chairman Stephen Faughnan said.

“The lockdown restricted re-letting and, in spite of demand being high, Government guidelines restricted the showing of property as it was not deemed an essential service, leading to a stock of empty properties accumulating over the previous three months,” he said.

“We expect the country to continue the return to work and the process of normality returning will increase demand for units and the current supply will be taken up rapidly.”

Rebound

In terms of the volume of properties for sale, the market rebounded sharply in June. More than 5,200 properties were listed for sale in the month compared with about 2,000 in both April and May. But the number of homes advertised for sale in June was still 15 per cent lower than the same month last year.

Mr Lyons noted that the rebound in properties both for sale and rent possibly reflects “an element of pent-up demand carried over from April and May”. In the rental market, there were 38 per cent more homes advertised in June than a year previously.

In Dublin, property prices fell 3.8 per cent in the 12-month period, while rents rose by 0.5 per cent. That trend was also seen in the rest of Leinster and in Munster.

In Connacht and Ulster, the market was bucking national trends with rental prices down 2 per cent and sale prices almost 1 per cent higher than this time last year.

The average sales price in Dublin stood at €369,000 at the end of June while the average rent stood at €2,023.

The sharpest fall in the average price of a home was in Co Limerick, where prices were down 11.4 per cent at €181,638 compared with June of last year. The largest rise was seen in Kilkenny, where prices were up 2.9 per cent at €219,683.

“The country is still in need of hundreds of thousands of homes, principally for smaller households of one to two persons, in the social and market-rental segments, and in or close to the biggest cities and towns,” Mr Lyons noted.