Rents increase sharply as number of properties available falls

Dublin is once again the hotspot of the rental crisis, according to figures from Daft.ie

The number of homes available to rent has fallen close to historic lows, while rents have increased sharply just as the economy emerges from the restrictions of the pandemic, according to figures from property website Daft.ie.

There were fewer than 1,400 properties to rent nationally on Daft at the beginning of February, according to the site’s latest rental price report for the final quarter of 2021.

In Dublin, there were just 712 properties available, the lowest level since Daft’s records began in 2006, and less than a quarter of the average rental stock available in February over the last 20 years.

The stock of properties was also at an all-time low in Munster, and barely above such lows in Connacht and Ulster, as well as outside of Dublin in Leinster.

Beyond the capital, there were just 685 properties listed for rent nationwide this month, less than a third of the available stock in February 2020, immediately before the pandemic.

The “unprecedented scarcity” of homes has coincided with a sharp spike in rents in Dublin, according to Daft. Rents in the capital rose by more than 4 per cent in just three months at the end of last year, to an average of €2,258 in the south of the county and €1,897 in the north. This was the fastest quarterly increase in seven years.

Average rent

Nationally, the average rent on Daft was €1,524 at the end of 2021, a rise of more than 10 per cent over the year.

Although the pandemic and working from home sparked a surge in rents outside Dublin over the first 18 months of the crisis, Dublin is once again "bearing the brunt of the pressure" of shortages and price rises, according to Trinity College Dublin academic Ronan Lyons, who wrote Daft's report.

The representative body for estate agents, the Institute of Professional Auctioneers and Valuers, said Daft's numbers "do not reflect the market in its entirety". Its chief executive, Pat Davitt, said many auctioneers no longer advertise their rental properties on websites such as Daft because they already "have several potential clients for each property". That suggests the true stock of homes to rent coming on to the market is higher than Daft's figure.

Currently, according to Daft’s data, rents in the capital are growing fastest in the less fashionable districts of Dublin 10, which includes areas such as Ballyfermot, and in Dublin 17, which includes Balgriffin and most of Coolock.

A three-bedroom house cannot be rented for less than €2,000 in all but a handful of Dublin postal codes, and costs an average of €2,570 in Dublin 4.

Daft calculates that in almost every part of the State it is cheaper to buy a home than to rent it, especially outside of the capital where rents accelerated sharply earlier in the pandemic.

This would hold true for almost all but the most expensive properties, even if current average mortgage interest rates were to rise by two percentage points.