RENT LEVELS FOR new tenancies remained high at the end of 2021, with rents in Dublin still highest at €1,972 per month, according to a new report.

The Residential Tenancies Board (RTB) rent index measures rental price developments faced by those taking up new tenancies in the private rental sector.

New rents nationally increased by 9% in the last quarter of 2021 from €1,298 in the last quarter of 2020 to €1,415 for the same period last year.

Social Democrats housing spokesperson Cian O’Callaghan said that the increase now means that new tenancies in Dublin cost more than the annual income of minimum-wage workers.

The average annual amount [renters in Dublin] will spend on rent in Dublin is nearly €24,000.

For context, workers on the minimum wage – a paltry €10.50 per hour – earn just €21,840 in a year. How are workers on the minimum wage – and there are plenty of them – supposed to survive when average rental costs now exceed their annual gross pay?

In the final quarter of 2021, rents for new tenancies in Dublin were €1,972 per month, compared to €1,104 per month outside Dublin.

The highest average rent in new tenancies was in Dublin while the lowest monthly rents were in Leitrim, where the average rent in new tenancies stood at €740 per month.

On a quarterly basis rents in new tenancies fell in 14 counties over the quarter. Rents for new tenancies in Roscommon increased the most with a quarterly growth rate of 12.6%.

On an annualised basis, the lowest growth in the standardised average rent for new tenancies was in Kildare where rents remained unchanged on the previous period.

There was a 48% drop in the number of tenancies registered in the quarter, which the RTB said is likely driven by factors such as the constraints on supply of properties and current tenants choosing to stay longer in existing tenancies. 

Dublin and the Greater Dublin Area accounted for over half of all new tenancy agreements registered in the quarter and 59.7% of new tenancies were for apartments.

The RTB said it wanted to remind landlords of legal requirement to register their tenancies every year as of 4 April 2022. 

RTB director Niall Byrne said this is a significant change for the residential rental sector and for landlords.

“One of the public benefits from annual registration will be to provide the RTB with current data on all rents which will enable us to publish more detailed reports on rents and rent levels, for both new and existing tenancies, beginning, we expect, in 2023,” he said.

The current Rent Index can only report on movements in rents for new tenancies registered with the RTB. With access to annual registration data, the RTB will be able to identify new rental stock that hasn’t been let previously, the type and size of landlord of this stock, the stock leaving the sector and the type and size of landlords associated with this, and, very importantly, rent levels in all existing residential rental stock.

“These forthcoming improvements will mean that the RTB will be in a stronger position to fulfil its statutory and regulatory functions in a more responsive, risk-based, and effective manner.”

He said it will also mean that the RTB will be better able to provide new insights and information to tenants, landlords and the wider public while helping inform the development of residential rental sector policy.

Reaction to the report

Threshold, the national housing charity believes that the average yearly rental increase of 9% in new tenancies – as reported by the Rental Tenancies Board today – hides some of the incredibly worrying increases on a county and city level, particularly those subject to Rent Pressure Zones and a 2% cap on rent increases.

“The average annual increase was 13.8% in Limerick City and 27.6% in Waterford City, which equate to an additional €1,844 and €2,740 in rent a year,” said Threshold chief executive John-Mark McCafferty.

This is money that many people do not have to spare, given the spike in inflation and huge increases in the cost of energy and fuel. 

Pat Davitt, IPAV’s Chief Executive welcomed the acknowledgement that the Index represents only new tenancies registered in quarter four of 2021.

“Unfortunately there has been a lack of comprehensive data in this area which the RTB is now attempting to address. But policy decisions have been made on the basis of insufficient data, which will likely lead to the State learning lessons long after the horse has bolted,” he said.

In this regard in today’s RTB figures the most striking takeaway is the drop of 48% in the number of new tenancies registered year on year in Q4.

“While the reasons are multi-faceted, including the fact that tenants are staying longer in existing arrangements, we have no doubt but that the continuing exit of the private landlord from the market is a major contributory factor.

“With the exit of the private landlord we may be losing lower rentals while new properties coming on the market have no restrictions on the rent levels capable of being charged, they can charge what the market will bear.”

Updated by Gráinne Ní Aodha at 11.52am.