Headline national rents have fallen for the first time since the middle of 2012, according to a new report released on Tuesday by property website Daft.ie.
According to the research, rents in December reduced incrementally, by just 0.1 per cent, compared to the previous three months. The decrease was driven by falling rents outside the five main cities.
Inside the main urban centres, rents continued to rise by 0.7 per cent across the three months, although they increased by a lower rate in Dublin than the city average for the rest of the State. Rents in the capital increased by 0.4 per cent.
Rate of increase
However, even as rents continue to climb in urban centres, the rate of increase in 2019 when compared to the previous year has "moderated significantly," according to Daft.ie and Trinity College Dublin economist Ronan Lyons. "Inflation is still positive, but at 4.1 per cent nationally and 3.5 per cent in Dublin, it is at its lowest level since 2012."
Outside the cities, rents fell by 0.8 per cent, with the largest falls seen in Connacht and Ulster. The average monthly rent nationwide was €1,402 in the last three months of 2019, some €659 higher than the low point of the rental market, which was recorded in late 2011.
The number of properties available for rent in the State continues to increase, with 3,543 available on February 1st, up 10 per cent on a year ago. However, Mr Lyons cautioned that this increase is coming off a low base, with the number of rental homes still 80 per cent below its 2009 peak.
He said it is “impossible to view these figures and not think of Election 2020”.
“Housing became perhaps the single most important issue in the February 2020 election,” he wrote in the rental market report. “[It] appears to have topped voters’ concerns. And given what has happened in the Irish housing system over the past decade, it is not hard to see why.”
The Daft report first noted tightening in the rental market in late 2009, with a shortage in the rental supply starting in Dublin and then spreading across the country. Mr Lyons urged politicians to eschew a rental freeze which has been promised by Sinn Féin, Labour, the Social Democrats and others.
He argued that a rent freeze would accentuate what he said was a gap between “movers” and “renters”, which had been caused by the introduction of rent pressure zones. “The most vulnerable in the rental market – those new to the city, those without networks, those who have to move because of a change in household circumstances and those subject to all forms of conscious and unconscious bias – will lose out,” he argued, while others on higher incomes with stable social circumstances would comparatively benefit.
“If that is what the public wants from public policy, then fair enough – but we should be explicit about it rather than claim that this is a policy designed to help those who need it.”
He further cautioned against linking a rent freeze to newly-built rental homes, which he said would have a “far more serious negative impact”.
“This would, in effect, turn off the supply tap overnight,” he said. The incoming government should, he argued, focus on tackling high construction costs and what he described as “dysfunctional social housing policies”.
“If housing is indeed the top issue for voters, then the new Government has a mandate to make those investments.”