RENTING IN IRELAND is becoming more expensive by the month but the rate of increase is slowing thanks to rent pressure zones, according to a new report.  

The RTB Rent Index reports the national average rent was €1,122 per month, up from €1,044 one year earlier. Dublin remains the most expensive place to rent with average monthly prices now at €1,620, representing an increase of €141 from the same period last year. 

The RTB Rent Index is compiled in conjunction with the Economic and Social Research Institute (ESRI). It has shown that rent increases for existing tenancies (5.4%) were lower than those for new tenancies (8%).

This indicates that Rent Pressure Zones are having a slowing effect on the level of increase. The measures were brought in to tackle spiralling rental costs. If a property is in one of these zones, it means the landlord can only increase the rent by 4% every year.

Although rents are now at a record high, and the Irish rental market is experiencing unprecedented demand, the number of landlords is falling with a decline of 8,829 tenancies and 1,778 fewer landlords than in 2015.

Commenting on the latest results, Rosalind Carroll, Director of the Residential Tenancies Board, said: “Affordability still remains an issue for the rental market with continued economic, unemployment and population growth contributing to rising demand across the country. We can also see rents across the country have continued to increase year-on- year.

The rate of rent inflation slowed this quarter somewhat, and which we will continue to monitor in the months ahead. The importance of strong protections for tenants is underlined by the fact that the pace of rent increase under existing tenancies is well behind that of new tenancies, which shows us that Rent Pressure Zones are working much better within existing tenancies, but there is still more to do in respect of new tenancies.

Carroll said she is very concerned that the number of landlords continues to decrease. She said that if we are to meet demand and ensure a well-functioning rental sector, then we need more landlords and different types of landlords to offer market options. 

Carroll added: “Unsurprisingly, Dublin is experiencing the most acute rent pressures with fewer than 15% of tenancies agreed at less than €1,000 per month, as compared to 70% elsewhere in the country. We can also see the Dublin rental sector is dominated by apartments (73%) as compared to less than one-in-two elsewhere.”

Dublin’s rental market continues to be the largest in the country, accounting for nearly two-in-five tenancies (72%) that were registered with the RTB. As of the third quarter of 2018, the standardised average rent for Dublin stood at €1,620, up from €1,479 one year earlier. This represents an increase of €141 euro on the standardised average monthly rent over a 12 month period, or nearly a €12 increase per month.

Second highest rents were in Galway City at €1,187 per month. Cork City’s average rents stood at €1,172, rents in Limerick City were €928 and rents in Waterford City were €638. On an annualised basis, rents in Limerick City have been growing most rapidly at 11.8%.

The data is reported in the RTB’s Rent Index report published today. The report is produced in conjunction with the ESRI and is based on 25,448 new tenancies registered with the RTB in the same quarter.