According to the latest Rental Report by Daft.ie, Ireland's residential market rents in the second quarter of 2023 rose by an average of 2.4% compared to the first three months of the year. Yet, compared to a year ago, rents in the open-market are now 10.7% higher, with the average market rent nationwide in the second quarter just under €1,800 per month. This compares to €1,387 in the first quarter of 2020 and a low of just €765 per month seen in late 2011.
There was a noticeable difference between trends in Dublin and elsewhere in the second quarter. In the capital, market rents rose by just 0.3% quarter-on-quarter - the second quarter in a row of muted increases. However, outside Dublin, the average increase between March and June was 4.3%, the second largest quarterly increase recorded outside the capital since the start of the Daft Report in 2006. Having fallen in the first quarter, market rents rose in each of the other main cities - Cork, Limerick, Galway and Waterford.
The extraordinary shortage of rental accommodation continues, although in recent months the number of homes available to rent has increased slightly. On August 1st, there were fewer than 1,200 homes available to rent nationwide. While this marked an increase of over 460 on the same date last year, availability remains extremely tight compared to other years. Indeed, the level of homes on the market is less than one third of what had been typical in the 2015-2019 period, which was already one of scarcity.
These figures refer to open-market rents but the report also includes an index of rents paid by sitting tenants, rather than movers, using a bespoke survey of tenants. It shows that, on average, rents paid by sitting tenants have increased by 3.8% over the last twelve months, with bigger percentage increases outside Dublin (4.5%) than in the capital (3.2%).
Ronan Lyons, Associate Professor in Economics at Trinity College Dublin and author of the Daft.ie report said, "The figures in this latest rental market report indicate something of a split in market conditions. In Dublin, the construction of new rental housing - together perhaps with the effect of layoffs in some larger employers - has led to an easing of pressure in the open market. Conditions remain far from benign for prospective tenants but the mismatch between strong demand and weak supply is not as stark as in recent quarters. Outside the capital, however, the lack of new rental homes means that the imbalance between supply and demand is still there. Indeed, in Connacht-Ulster, rents jumped over 6% in just three months pushing the annual rate of inflation to its highest level ever recorded (21.2%) in a series stretching back to early 2006."
Average market rents, and year-on-year change, 2023 Q2