The latest rental report by property website Daft has revealed that rents are increasing “almost everywhere” across Ireland, with little indication that the crisis will end soon.
According to Ronan Lyons, Associate Professor in Economics at Trinity College Dublin, “This latest Daft.ie Rental Report shows that, once again, rents are rising almost everywhere in the country.”
According to Lyons, over the course of 2024, rents rose in 52 of the 54 markets covered in the country, making last year the fourth year in a row and tenth in the last 11 years where at least 50 markets of the 54 covered saw rents rise.
“We are, in other words, over a decade into a rental crisis and have very little to suggest that it will end any time soon,” he added.
While new rental homes were built in Dublin in 2022 and 2023, helping to slow rental inflation, “the rate of new building has fallen back and looks set to fall further in 2025.” The situation outside the capital is even “grimmer”, as “effectively no new rental housing has been added outside Dublin in the last few years and, unsurprisingly, it shows in the availability of homes to rent.”
Dwindling supply
The net result of this is that the number of rental homes available across the country remains critically low.
“In Dublin, there were just 1,200 homes available to rent in February, about one third below the average for 2015-2019,” Lyons said.
“Outside Dublin, across the entire country, there were fewer than 1,100 homes available to rent on the same day ‐ down almost 60% on the late 2010s average.”
Ireland introduced rent controls in 2016 and further tightened them in 2021, making them among the strictest in the world. However, Lyons pointed out that “rent controls cannot solve the underlying shortage that led to them being introduced in the first place.”
The impact of rent controls
The report details how rent increases for ‘movers’ – tenants entering the market – have diverged significantly from ‘stayers’ – those who remain in the same rental property. “The first phase, without rent controls, saw broadly comparable increases across the two groups: about 20% for ‘stayers’ between 2010 and 2015 and about 30% for ‘movers’ in the open market.”
From 2016 to 2020, as rent controls were introduced but not yet overly strict, “those in the open market saw rents rise almost 40% in five years, while those staying put saw rents increase by just 13%.” When stricter controls were imposed in 2021, “‘mover’ rents have increased by a further 47% while ‘stayer’ rents have increased by just 7%.”
Lyons argues that “this is the current set-up, which is clearly unsustainable,” adding that “where movers used to face 1.5 times as much exposure to rental shortages, now they are exposed to almost seven times as much.”
Policy recommendations
The OECD has advised Ireland to move away from tenancy-wide rent controls.
“A further option would be to increase the annual limit of increases to allow for maintenance and improvement,” Lyons said.
“And the government may also want to consider exempting new supply from control, as other countries do. These three options would collectively undo much of the damage while being politically feasible.”
With the country facing a rental shortfall of between 150,000 and 200,000 homes, Lyons concludes that “reform is needed sooner rather than later.”
The full report is available at Daft.ie.