THE PRICE OF rental accommodation rose across the country by an average of 0.2 per cent in the third quarter of this year compared to Q3 2010 – the first year-on-year rental increase recorded since early 2008.
Cork city saw the greatest jump in rental prices (up 6.2 per cent), while Co Longford rents dropped by 6 per cent to an average monthly payment of €458. Kerry rents dropped 5.9 per cent to a €692 per-month average.
According to Daft.ie’s latest quarterly rental report compiled by economist Ronan Lyons, the average rent in Ireland is now €825 a month, down a third from peak prices in early 2008.
Lyons says that oversupply of rental properties in parts of the country means that a division still exists between the rental markets in urban and rural areas. The Q3 figures show the highest demand for rental properties in Dublin and Cork, and these areas also experienced the smallest oversupply of properties.
“The total stock of properties sitting on the rental market fell from 20,000 on July 1 to 16,000 on November 1. This is mainly due to a fall in properties in Dublin, where the stock has fallen by almost 60 oer cent in two years,” Lyons said.
The available stock of rental properties is being more quickly used up in the cities than rural areas. As of 1 November, the level of available properties in urban areas had fallen by almost one-fifth on last year, while rural levels dropped by just 5 per cent.
The main changes
Rents in Dublin have risen by an average of 0.8 per cent to an average of €1,050 a month, while in Cork city rent is up 6.2 per cent to an average monthly payment of €883.
Meanwhile, rent dropped in other cities compared with Q3 2010 – down 1.5 per cent in Limerick (to €692/month), down 1.6 per cent in Galway (to €758/month) and down 1.5 per cent in Waterford (to €653/month).
However, rents in Galway, Limerick and Waterford rose slightly between the second and third quarters of 2011.
Commenting on the report, financial analyst Philip O’Sullivan says that although the national view on Ireland’s rental markets appears to be stable, significant regional difference remain which suggest a “‘two Irelands’ narrative”.
O’Sullivan says that the remaining overhang of properties in rural areas mean that pressure to reduce rents will continue “for many quarters to come”.
Lyons says that any changes to the rent allowance scheme in the forthcoming Budget 2012 plan could have a knock-on effect on rent, remarking that “any reform of rent allowance may have an impact on rents, especially in cheaper locations. Thus, the outlook for 2012 looks like one of different trends in urban and rural markets”:
A difficult growth outlook, with continued high levels of emigration and unemployment, allied to a large surplus of rental properties, bodes ill for rents in rural areas.In contrast, in the cities, tightening supply – only a third of available rental properties in Ireland listed on Daft.ie on November 1 were located in Dublin, Cork, Limerick, Waterford and Galway – and elevated yields suggests that there is rather less ‘downside risk’ to rents in those areas.
Overall, rents in Ireland rose 0.2 per cent on Q3 2010 and 0.1 per cent on Q2 2011.
Check out the per-county rental price changes since last year as per Daft.ie’s Q3 2011:
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