Rate of rent rise at 2 year high as supply hits new low

The average monthly rent stood at €1,477 by the end of June, up 2.4% on the first quarter and almost 99% from the low of €742 per month seen in late 2011.

There were big variations across the country in the second quarter with rents in Dublin 2 falling by an average of 7%, while in Kerry, the rate of rental inflation hit 17%.

Cities outside Dublin have seen significant price spikes.

In Cork, Galway and Limerick cities, rents are between 9% and 10% higher than a year ago.

In Waterford, they are nearly 12% higher. Dublin rents were, on average, 0.5% higher, but there were variations within the county.

Outside the cities, rents rose by 8.6% in Leinster, by 13.7% in Munster and by 14.7% in Connacht-Ulster.

Only 2,455 rental homes were available across the country at the end of June, the lowest number on record.

Fewer than 800 rental homes were available outside of the capital.

“There were just 15 homes available to rent in Waterford, city and county, on August 1st and only 8 in all of Offaly,” Ronan Lyons, Trinity College Professor and author of the daft.ie report cited, emphasising the lack of supply.

“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,” he said.

He pointed out that the problem was now widespread, and not confined to Dublin.

“Policymakers – and citizens – should be wary of anything that limits the ability of foreign savers to build new rental homes here,” he added.

Supply and demand

Responding to the report, the Institute of Professional Auctioneers & Valuers said it demonstrated the need to tackle the issue of supply and that would be done by building homes at affordable prices.

“Tinkering around the edges of the demand side, in controlling rents and making mortgages much more difficult to qualify for, have seen two private landlords leave the market for every one that has entered, and it has seen mortgages largely become the preserve of those on higher incomes or those fortunate enough to have family resources to support them,” Pat Davitt, IPAV Chief Executive said.

The Central Bank rules on mortgage lending – which limits the amount that can be borrowed according to income and the size of a deposit from the buyer – are currently being reviewed, but the regulator insists they will remain in place.

Mr Davitt said the government’s new housing plan – which is due to be published in the coming weeks – must include the entire planning process as well as the entire tax treatment of housing and investors in housing.

He repeated his call for the rental market to be reviewed in its entirety.