THE AVERAGE NATIONWIDE monthly rent has reached an all-time high of €1,391, marking a 6.7% increase in the 12 months to June 2019.
This marks the lowest rate of rental inflation across the country since the final quarter of 2013. However, the second quarter of 2019 marks the 13th consecutive quarter of record rents.
The figures are included in the latest quarterly rental report by Daft.ie, which will be published today.
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The average listed rent is now €361 per month higher than the previous peak in 2008 (up 35%) and almost €650 higher than the low seen in late 2011.
The slowdown in rental inflation is driven by Dublin, where annual inflation has fallen from a high of 13.4% in mid-2018 to 4.5% now.
There has also been a cooling off in inflation in the other major cities, although the level of inflation is still higher than in Dublin. In Cork, rents are 7.9% higher than a year ago, while in Galway city, rents are 9.1% higher.
In Limerick, rents have increased by 10.5% in a year, similar to the 10% increase seen in Waterford city. Outside the major cities, rental inflation varies from 6.2% in Leinster to close to 12% in both Munster and Connacht-Ulster.
Average rents, and year-on-year change, as of the second quarter of 2019:
Demand continues to far outstrip supply and on 1 May 2019, there were only 2,700 homes available to rent nationwide – the lowest number ever recorded.
New rent pressures zones came into effect in 19 locations last month, including areas in Waterford, Galway and Cork – counties which all experienced notable rent increases in the last quarter.
Average mortgage much cheaper than average rent
The average monthly rent in Irish cities is generally much higher than the monthly cost of a mortgage.
For example, the average mortgage in Dublin city centre is €1,488 per month, compared to the average monthly rent of €2,064.
Economist Ronan Lyons wrote the Daft report. Commenting on its findings, he said the slowdown in rental inflation “will be welcome news to tenants and policymakers, among others”.
However, he said the situation is “more likely driven by limits to affordability than improved supply”.
Availability on the rental market remains at levels that were unprecedented prior to 2015. For example, in the Dublin market, there were just 1,541 properties available to rent on August 1st. While that’s up from 1,121 two years ago, it’s well below the average of 4,700 for the preceding decade.
Lyons said that building new rental supply “remains critical to fixing the rental market”. Figures in the report suggest that up to 25,000 new rental homes will be built over the coming years, which Lyons said “will certainly help address the supply-demand imbalance”.
“Stopping further inflation should be just the first target for policymakers, however,” he said, adding: “Bringing rents down to affordable levels must remain the ultimate goal.”
‘Frantic search for student accommodation’
Pierre Yimbog, president of the Technological University Dublin Students’ Union, said the “critically undersupplied” rental market is having a negative impact on students’ “studies, wellbeing, and future”.
More than 51,500 CAO applicants received offers last week – a record high. Yimbog said these students, as well as those progressing to their next year of study, “will once again swap summer exam anxiety for the stress of a frantic search for accommodation”.
Yimbog said another worrying trend is the rise in reports of “homeless students who have ended up ‘couch surfing’ or, in extreme cases, sleeping in cars”, adding that the issue must be addressed as a matter of urgency.
Separately, charity Threshold and the Union of Students in Ireland have called for the government to immediately implement a deposit protection scheme to safeguard rental deposits and protect tenants in the private rented sector against potential scams.
“This scheme has been promised for several years,” Aideen Hayden, chairperson of Threshold, said. “The government initially committed to addressing the illegal retention of deposits by landlords in its 2011 programme for government and successive ministers for housing have agreed to its introduction.
In 2017, the minister again said that it would be established and would be operated by the Residential Tenancies Board. ‘We won’t be waiting until 2019 for the RTB to take on these enhanced roles,’ he said.
Lorna Fitzpatrick, president of the USI added that, due to a shortage of student accommodation, many third-level students are “relying on the private rented sector for a place to live while attending college”.
“These students are already struggling to afford their college fees and rent, particularly those reliant on SUSI maintenance grants, and they are a group that is especially vulnerable to fraud and scams,” Fitzpatrick said.
She added that a deposit protection scheme “would minimise their exposure to rental fraud and would also be of benefit to international students who may have to return to their home country without securing a return of their deposit”.
Journal Media Ltd has shareholders in common with Daft.ie.
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