20 May 2024
By Elaine Murphy
elaine@TheCork.ie
The number of homes available to rent on the open market remains low.
Nationally, market rents rose by an average of 0.6% in the first quarter of 2024, according to the latest Rental Report by Daft.ie. While this marks the thirteenth consecutive quarter in which rents nationwide have increased, the increase between December and March is the smallest in that run. The average open-market rent nationwide in the first quarter of the year was €1,836 per month, up 4.9% year-on-year.
The decline in rental inflation, from a mid-2022 peak of 14%, is driven by Dublin. In the capital, market rents in the first quarter were 2.5% higher than a year previously. But rental inflation has cooled in other markets as well, with the average increase outside Dublin 7.2% year-on-year. In Galway city, rents were up 5% year-on-year, while in Waterford and Cork cities, the increases were 6.9% and 8% respectively. However, in Limerick city, market rents were up 17.5% year-on-year, one of the largest increases in the country.
The number of homes available to rent on the open market remains low. On May 1st, just over 2,000 homes were available to rent, effectively unchanged on the same date a year previously and well below half the 2015-2019 average of almost 4,400. Availability had almost doubled between late 2022 and late 2023 but has fallen considerably since the start of the year.
“Improved availability of rental homes from late 2022 to late 2023 led to falling inflation. Those improvements in availability now look to have finished, at least for now. This suggests, thus, that further pressure on open-market rents this year is likely to be upward, rather than downwards.”
Ronan Lyons, Associate Professor of Economics at Trinity College Dublin.
Commenting on the report, Ronan Lyons, Associate Professor in Economics at Trinity College Dublin and author of the Daft.ie Report, said:
“Rental inflation has slowed considerably over the last 18 months, driven in large part by the construction of significant numbers of new rental homes in the Dublin area. More supply, even at the upper end of the market, relieves pressures across the market and, in the second half of 2023 in particular, new supply saw availability improve and inflation has eased.
However, improvements in the availability of homes to rent look to have stalled. Without additional increases in rental supply, any pressure on rents is likely to be upward in nature, further straining affordability for those on regular incomes. For that reason, policymakers must develop a thorough understanding of rental supply dynamics ahead of a detailed plan on dramatically increasing rental supply over the rest of the decade.”
Average market rents, and year-on-year change, 2024 Q1
Dublin: €2,395, up 2.5% year-on-year
Cork city: €1,870, up 8.0%
Limerick city: €1,933, up 17.5%
Galway city: €1,861, up 5.0%
Waterford city: €1,495, up 6.9%
Rest of the country: €1,467, up 6.8%
The full report along with all previous reports are available from www.daft.ie/report and include commentary by Ronan Lyons, Associate Professor in Economics at Trinity College Dublin and author of the report, as well as figures on take-up of multi-unit rental housing, rents paid by sitting tenants, and analyses of affordability and residential yields around the country.