Rise in cost of renting slows as impact of Covid-19 begins to hit
Year-on-year growth rate nationwide at lowest level since 2012, RTB figures show
The cost of renting a home in Ireland is now increasing at the slowest rate in almost a decade as the impact of Covid-19 is begins to hit according to new figures from the rental sector’s authority.
The Residential Tenancies Board’s (RTB) latest rent index covering the months between April and June suggests that rents fell by 0.6 per cent across the State between the first and second quarter.
The year-on-year growth rate nationwide was at its lowest level since 2012, according to the RTB figures.
The average cost of renting a home was put at €1,226 at the end of June compare to €1,233 at the end of March.
The average rent in Dublin is €1,709 with the average outside the capital put at €928. The county with the lowest average rent was Leitrim where the cost of renting a home was put at €599 per month.
Compared to the previous quarter, rents outside Dublin increased by 0.3 per cent, while they fell by 1.5 per cent in Dublin.
Spread out over a year Dublin has experienced no growth, while rents outside Dublin climbed by 3.4 per cent.
Decline in tenancies
The RTB’s Rent Index is compiled with the Economic and Social Research Institute (ESRI) and is based on actual rents paid on almost 17,000 tenancies registered with the RTB in the quarter. It includes homes new to the rental sector, new tenancies in existing housing stock and renewals of existing tenancies.
“It is clear that the Covid-19 pandemic has significantly impacted the rental sector,” said the Interim director of the RTB Padraig McGoldrick.
Annual growth has eased in most counties and the average rent in 13 counties was lower in at the end of June compared to the end of March. There was also a sizeable fall in the number of tenancies registered with the RTB and out of the 26 counties, 21 experienced a decline in the number of tenancies registered over the spring and early summer.
There were seven counties where the average rent exceeded €1,000 per month – Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow – while Limerick had an average rent of €988. The high rental levels in these areas relative to other counties reflects the concentration of demand close to the country’s largest employment hubs, the RTB said.
The senior research officer at the ESRI Conor O’Toole said the “economic shock associated with the pandemic has been the sharpest and most rapid in living memory”.
He said the “economic adjustments are beginning to feed through into the rental sector with rental inflation moderating across the country.”
He noted that the drop in inflationary pressures “has been strongest in the Dublin area which is the country’s largest rental market. It is likely that continued downward pressure will be exerted on rents in the short term as the economy continues to struggle under Covid-19 conditions.”