Average rents have climbed by 43 per cent on pre-Covid levels, with rents in Dublin now averaging €2,476, a new report out today shows.
The latest Daft.ie Rental Report for the third quarter of this year sheds light on growing rent inflation in the State, with some parts of the country seeing record rates.
The document shows that the average open-market rent nationwide for the third quarter was €1,955 per month. In Dublin, rents now average €2,476, with rents across the nation increasing by an average of 7% on this time last year.
Meanwhile, the number of available rental homes in Ireland is just over 2,400. This is a 14% fall on this time one year ago – and a sharp fall on an average of 4,400 homes available between 2015 and 2019. In Dublin, there are under 1.370 available homes to rent, according to the report.
Market rents nationwide rose by 1.7 per cent between the second and third quarter of the year, marking the 15th consecutive quarterly increase. When compared to before Covid, rents are up 43%.
Over the course of 2023, market rents in Dublin rose by just 2.6 per cent ‐ with the exception of the year of Covid, the lowest rate of inflation since 2012. Authors noted that as Dublin was enjoying something very close to stability, most of the rest of the country was experiencing double-digit inflation in market rents.
In Kilkenny, rents were up 17% year-on-year, while in Laois they had risen by even more. Cavan, Roscommon and Longford saw similar rates of inflation. Only five of the 29 rental markets tracked in the Report had rates of inflation below 10% at the start of the year ‐ while only one market in the capital (Dublin 20) had a rate above 10%.
In Dublin, rental inflation has also been on the increase over the last few months, aligning the capital more closely with other counties.
Rents for the third quarter were 5.2% higher in Dublin than the same period in 2023 and twice the rate of inflation recorded at the end of last year, when the figure sat at 2.6%.
The report notes: “Over the course of the year, inflation in rents in the open market in Dublin has steadily increased, doubling from a low of 2.6% to reach 5.2% in the latest report. While still well below the post-covid surge in rents in 2022, there are growing signs of pressure in the capital’s rental market.
“Meanwhile, in the rest of the country, inflation is easing. The ‘Ex-Dublin’ rate has fallen from 12.3% at the start of the year to 8.9% in this Q3 report. And the quarter-on-quarter increase outside the capital, at 1.4% in the third quarter, is the joint-lowest in this cycle of the market, with now 17 consecutive quarterly increases.
“In other words, the ‘Dublin versus Elsewhere’ difference in inflation has fallen from almost ten percentage points to less than four since the start of the year.”
The report released on Wednesday notes a surge in apartments being completed in Dublin in recent quarters, but warns that surge is now waning.
“While fewer than 3,000 new apartments were built in Dublin in 2018, 2019, or 2020, during 2021 that increased to 4,000 and in 2022 almost 7,000. The peak of the apartment construction boom was 2023, though, when over 9,000 apartments were built in Dublin,” authors write.
“This represented not only more than doubling in the space of two years but also 80% of all apartments built in the country last year. The majority of those apartments were for the private rental market, although a substantial share were for social housing, through either Approved Housing Bodies or local authorities,” the Daft report writes, adding:
“As of 2020, Dublin was short something like 90,000 apartments. To both address the backlog and meet new need, it needs something like 15,000 apartments built each year through the 2020s. The only year it has come close is 2023 ‐ and that is the only year in which rents in Dublin have been close to stable.”
“That was the good news. The bad news throughout has been that the apartment boom was limited to Dublin, because of the high cost of construction. The fresh bad news is that Dublin’s apartment boom seems to be coming to an end.
“The number of apartments completed in Dublin during the first nine months of 2024 is down a quarter on the same period in 2023. As the pipeline dries up, conditions in Dublin are likely to mirror those in the rest of the country: a re-emergence of very weak supply in the face of strong demand.”
The report’s author, Ronan Lyons, wrote: “The target for the new government has to be giving the same priority to the rental sector that has been given to owner-occupiers and social housing over the last few years. Otherwise, it’s hard to see when conditions will change.”