A new report released today has revealed that rents saw a 7 per cent hike in the second quarter of the year, compared to last year.
The report, released on Monday by Daft.ie, showed that market rents increased by an average of 2 per cent in the second quarter of the year, compared to the first few months of 2024. It is the 14th consecutive quarter in which nationwide rents increased, and the 45th time an increase was recorded in the last 48 quarters.
The report for the second quarter of the year showed that rents increased by 7.3 per cent in one year, with authors noting that in the last two years, open-market rents in Dublin have increased by a total of 12%.
“In the other cities, they have increased by twice as much. This marks a continuation of a trend noticeable since the pandemic: rents in Dublin are up 26%, while rents in the other cities are up an average of 52%,” author of the report, Ronan Lyons, Associate Professor in Economics at Trinity College Dublin, said.
Across the 54 markets covered in each Daft.ie Rental Report, market rents were over 7% higher on average in the second quarter of 2024 than a year previously.
The report notes: “This means that inflation has been largely steady for the last three quarters, following a slowdown from very high rates of increase seen in particular in 2022. The slowdown in inflation has been most marked in Dublin, where rents increased by just 3.5% in the year to June, compared to an average of 10.6% seen elsewhere in the country. While inflation cooled in most parts of the country in 2023, there has been little change in the last couple of quarters, with inflation largely stable.”
In Dublin, rents in the second quarter of the year were 3.5 per cent higher than a year earlier, while elsewhere in the country, they rose to an average 10.6 per cent higher.
Market rents rose particularly sharply in Limerick City, which saw a 21 per cent year-on-year increase, but three other cities also saw increases in the double-digits, ranging from 13 per cent in Galway to 10 per cent in Waterford.
In the capital, rents were highest in South County Dublin – sitting at an average of €2,656 per month, followed by in South City, where average rent was €2,512. In the North City and in the City Centre, rent averaged €2,377 per month, while in West County Dublin, the average rent fell to €2,300. North County Dublin had the cheapest annual rent, at €2,244 per month.
Nationwide, monthly rent averaged €1,922.
Rental inflation outside the five main Irish cities peaked at 14.1% in mid- 2023 but has since eased back to 9.9%, as of mid-2024, the report noted. Meanwhile, the availability of homes to rent remains largely unchanged The total number of properties available to rent on August 1st was just over 2,200. This is effectively unchanged on the same date a year ago but is also one of the lowest totals on record, back to 2006.
Commenting, author of the report, Ronan Lyons, said it was unfortunate that “gains in availability” had “run out of steam,” noting:
“On August 1st, there were fewer than 1,350 homes on the market in the capital. While there are seasonal factors, the stock of homes available to rent was unchanged (actually down 1%) on the same date a year ago. Sixteen months of improving availability are over.
“Outside Dublin, the picture had never been quite as optimistic to begin with ‐ as almost all of the new rental supply was confined to the capital, because of high construction costs. Between 2016 and 2019, there was an average of just over 2,500 rental homes available at any point in time, excluding Dublin.
“That total fell to below 1,000 during 2022 and 2023 and remains stuck there. As of the start of August 2024, there were fewer than 900 homes available to rent across the country, excluding Dublin. Across Cork, Galway, Limerick and Waterford cities combined, there were just 150 homes available to rent at the start of this month.”
“Where availability goes, affordability follows: supply is the single most important determinant of rental level. When supply is tight, rents are pulled up. We can see this in the path of rents in Dublin compared to the other cities over the last two years.
“In the last two years, open-market rents in Dublin have increased by a total of 12%. In the other cities, they have increased by twice as much. This marks a continuation of a trend noticeable since the pandemic: rents in Dublin are up 26%, while rents in the other cities are up an average of 52%.”
“Housing takes time to build, always and everywhere. Housing in Ireland takes longer than in most jurisdictions, because instead of choosing between a zoning system and a permissions system, we have both ‐ and more recently we have added the Courts system on top.
‘Apartment housing, the stock in trade of rental homes, takes longer than developments of houses. And of course with lockdowns, apartment housing in Ireland in recent years has taken even longer again.
“It is most unfortunate that pro-rental policies were scrapped just as the evidence was starting to emerge of their success. Reintroducing pro-rental policies is, however, not a discretionary policy option. It is an imperative choice if Ireland is to have some semblance of a healthy housing system by the end of the decade.”