According to the latest Ireland Rental Report by Daft.ie, residential rents in the second quarter of 2021 were an average of 5.6% higher than the same period in 2020. The average monthly rent stood at €1,477 in the second quarter of 2021, up 2.4% on the first quarter and almost 99% from a low of €742 per month seen in late 2011.
There continues to be significant differences in trends across regions. In Dublin, rents rose for the second consecutive quarter, by 1.4% between March and June, but are just 0.5% above the level seen a year ago. The other cities, however, have seen much larger increases in rents: in Cork, Galway and Limerick cities, rents are between 9% and 10% higher than a year ago, while in Waterford, they are nearly 12% higher. Outside the cities, rents rose by 8.6% in Leinster, by 13.7% in Munster and by 14.7% in Connacht-Ulster.
The sharp increases in rents reflect an unprecedented scarcity of rental homes. Nationwide, there were just 2,455 homes available to rent on August 1st, an all-time low in a series that extends back to January 2006. On average over the past fifteen years, there have been nearly 9,400 homes available to rent at any one time, while the 2015-2019 average was almost 3,900. While the number of homes available to rent in Dublin is down 44% year-on-year, it is close to levels seen in 2019. Outside Dublin, however, there were just 789 homes available to rent, by far the lowest on record - prior to 2020, the lowest level had been just below 1,500.
Commenting on the report, Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said: "As the impact of Covid-19 on daily life begins to recede, the underlying issues facing Ireland's rental sector are re-emerging. It is a sector facing unprecedented shortages, with extraordinarily tight supply: to give just two examples of many, there were just 15 homes available to rent in Waterford, city and county, on August 1st and only 8 in all of Offaly. Ireland's rental sector has undergone a lost decade and half, with almost no new rental homes built. This cannot be solved by trying to regulate prices. It can only be solved by adding significant amounts of new supply - and not only in Dublin. In that regard, policymakers - and citizens - should be wary of anything that limits the ability of foreign savers to build new rental homes here."
Average rents, and year-on-year change, Q2 2021