Market rents in the first three months of the year were nearly 12% higher than the same period last year, according to the latest report from property website daft.ie.
The average market income between January and March stood at 1,567 euros per month, the report concludes, which represents an increase of almost 3% compared to the last three months of 2021.
Market rents are now more than double the low of €765 a month seen at the end of 2011.
The daft.ie rental report is based on the rents that landlords are looking for from a renter’s perspective.
The report does not reflect what tenants pay on existing leases.
However, in this latest report, daft.ie included an estimate of trend rents for active tenants since 2010, compared to new tenants paying market rates.
While market rent inflation is currently above 10%, and market rents have doubled over the last decade, “permanency” rents are estimated to have increased by only 1.5% over the last year and less than 40% during the last ten years.
“In Dublin, the gap in rent increases since 2017 between those moving (28%) and those staying (15%) is smaller than in the rest of the country, where it is 50% versus 6 %,” Ronan Lyons, Trinity College Economics Professor and reporting author for daft.ie said.
“However, these substantial gaps across markets raise uncomfortable questions about lawmakers’ focus in recent years on protecting rents for tenants,” he added.
Rents for new leases are being buoyed by an acute shortage of properties available to rent.
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According to calculations by daft.ie, there were only 851 homes available to rent on May 1.
That’s down from the more than 3,600 properties available a year ago and another new all-time low in a series going back more than 15 years to 2006.
“The recent drop in rental housing is seen across all regions of the country, with availability falling 81% in Dublin and 66% in the rest of the country,” the report states.
While there have been differences in regional rental trends in recent quarters, the rate of increase was similar across all major regions between early 2021 and early 2022.
In Dublin, market rents increased by 10.6% year-on-year, while in the cities of Cork and Galway, rents rose by 10.2% and 13.8%.
Inflation was higher in the cities of Limerick and Waterford, at 15.5% and 16.2% respectively, while outside the cities the average increase was 12.7%.
“As always, in a rental market beset by a chronic and growing housing shortage, the only real solution is to increase the number of homes. With more pressure from certain quarters to stop the construction of new rental housing, lawmakers You have to control your nerves.” Ronan Lyons concluded.
Speaking on RTÉ’s Morning Ireland, Ronan Lyons said things are “getting worse” for those on the open market.
Lyons said the number of homes available on the open market “has collapsed” in the last year.
He said that Covid-19 and the shift to working from home in certain sectors has allowed people in the rental market to look further afield.
“For example, suburban Dublin counties haven’t seen as much upward pressure on rents as counties further away from major cities, suggesting people have been looking where rents are cheaper,” he said.
Lyons said rent controls are effectively a measure to protect current tenants rather than those taking new leases, but those who are having a harder time are those on the open market.
He said multi-unit rentals have started up again, and if Dublin were to add 30,000 to 40,000 rental homes to the existing 150,000, it would have “a huge impact” on the affordability of existing properties.
“But unfortunately, that’s not a solution for places in the rest of the country where supply problems are that bad,” he said.
“Reducing construction costs and implementing much more generalized cost rental and social rental systems would be the solution for everyone to have a home that meets their needs,” he adds.