Rent price inflation in Ireland has risen to record levels on the back of “an extreme shortage of rental homes”, according to property website Daft.ie.
The company’s latest quarterly rent report, which is based on asking prices for properties listed on its website, indicated that market rents nationally were on average 14.1 per cent higher in the third quarter of this year than they were in the same period of 2021.
This was the highest level of annual rent inflation recorded by Daft since it started reporting on the market here in 2006.
Daft said there were just 1,087 homes available to rent on its website on November 1st, down about 25 per cent on the same date last year.
It also noted that this total was about a quarter of the average level of availability during the 2015-2019 period. In Dublin, the shortage of available rentals was even starker with just 345 homes listed for rent at the beginning of November.
“Over the past 20 years, the best predictor of future changes in rents is the number of homes available at any particular point in time,” the report’s author and Trinity College Dublin academic Ronan Lyons said.
“As that has collapsed over the past 18 months, it was apparent that there would be significant upward pressure on rents all across the country,” he said.
“This has been confirmed in these latest figures, which show record quarterly and annual increases in market rents, despite rents already being at very high levels,” Mr Lyons said.
Daft’s report indicated that the average asking price for rent nationally between July and September this year was €1,698 per month, up 4.3 per cent on the second quarter of 2022 and 120 per cent above the low of €765 per month seen in late 2011.
In Dublin, market rents rose by 14.3 per cent year-on-year to average €2,258 in the third quarter, while in the cities of Cork and Galway rents rose by 12.1 per cent and 16.4 per cent to average €1,708 and €1,713 respectively.
Outside of cities
Inflation was even higher in Limerick and Waterford cities, at 17.1 per cent and 17.4 per cent, with average rents in the two cities put at €1,604 and €1,357. Outside the cities, the average price increase was 13.8 per cent and the average rent put at €1,318.
Daft’s report also included an index of rents paid by sitting tenants, rather than movers, which showed that, on average, rents paid by sitting tenants have increased by 2.5 per cent over the past 12 months.
Since the introduction of Rent Pressure Zones in 2016, rents of sitting tenants have increased by 17 per cent on average, compared to an average increase in open-market rents of nearly 75 per cent over the same period.
Mr Lyons also queried Government plans to scrap the current build-to-rent (BTR) planning classification, noting the BTR system had “helped generate a pipeline of tens of thousands of new rental homes that are now coming on stream and represent the best hope for alleviating the chronic shortages in the rental market. If the BTR system is to go, policymakers must have a clear plan on how tens of thousands of new rental homes will be delivered this decade in all major towns and cities.”