A chronic undersupply of rental accommodation is placing further upward pressure on rents, according to property website Daft.ie.
In its latest quarterly report, Daft said rent prices nationally rose at an annual rate of 5.6 per cent in the second quarter, the strongest year-on-year increase since mid-2019.
The increase reflects an “unprecedented scarcity” of available properties, it said, noting there were just 2,455 homes available to rent on its website on August 1st last, the lowest number since its quarterly series began in 2006.
Outside Dublin, there were just 789 homes available to rent, by far the lowest on record. Prior to 2020, the lowest level had been about 1,500.
On average over the past 15 years, there have been nearly 9,400 homes available to rent at any one time, Daft said, while the 2015 to 2019 average was almost 3,900.
According to the report, the average monthly asking price for rent stood at €1,477 in the second quarter of 2021, up almost 99 per cent from a low of €742 per month seen in late 2011, while the average in Dublin was €2,035.
In Cork city, the average was €1,524 compared to Galway city (€1,443); Limerick city (€1,337); Waterford city (€1,136) and the rest of the country (€1,117).
Daft, however, noted that there continues to be significant differences in price trends across regions.
In Dublin, rents rose for the second consecutive quarter, by 1.4 per cent between March and June, but are just 0.5 per cent above the level seen a year ago.
The other cities, however, have seen much larger increases in rents: in Cork, Galway and Limerick cities, rents are between 9 per cent and 10 per cent higher than a year ago, while in Waterford, they are nearly 12 per cent higher.
"As the impact of Covid-19 on daily life begins to recede, the underlying issues facing Ireland's rental sector are re-emerging," Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said.
“It is a sector facing unprecedented shortages, with extraordinarily tight supply: to give just two examples of many, there were just 15 homes available to rent in Waterford, city and county, on August 1st and only eight in all of Offaly.
“Ireland’s rental sector has undergone a lost decade and half, with almost no new rental homes built. This cannot be solved by trying to regulate prices,” Mr Lyons said.
“It can only be solved by adding significant amounts of new supply – and not only in Dublin. In that regard, policymakers – and citizens – should be wary of anything that limits the ability of foreign savers to build new rental homes here.”