‘Extraordinary collapse’ in supply leads to record spike in rents

‘Extraordinary collapse’ in supply leads to record spike in rents

An “extraordinary collapse” in supply of rental homes has driven rents to record highs, up 14.1% compared to the same time last year. 

The Daft.ie Rental Report for Quarter 3 of this year shows 75% fewer rental homes available than in 2019, and almost 60% fewer compared to last year. 

Severely constricted supply has driven up rents by 14.1% between July and September compared to the same three-month period last year. That is the highest rise recorded in the daft.ie report since its launch in 2005, with the most recent 4.3% quarter-on-quarter increase also a new series high.

Average market rents were €1,688 per month between July and September. That is 120% above the low of €765 per month in late 2011.

In Cork city, market rents rose by 12.1% year-on-year to €1,708 while rents in Dublin at €2,258 rose by 14.3%.

Rents in Waterford city rose by 17.4% annually to €1,357, and in Galway city, average rents at €1,713 rose by 16.4%.

Limerick city saw average market rents at €1,604 — a 17.1% year-on-year rise.

Average market rents rose by 13.8% outside the cities. 

In Cork County, average rents were €1,305, a 7.3% year-on-year increase.

In Kerry, average rents were €1,171, an 8.7% annual increase.

Average rents in Tipperary were €1,133 — an increase of 12.8%, while a one-bed to rent in Tipperary rose by 18.4% to €777.

Nationwide, there were just 1,087 homes available to rent on November 1, up somewhat from August but down almost 60% on the same date a year ago.

And in Munster, there were just 267 homes listed for rent on November 1, up slightly on the 236 homes available a year ago, but still only a fraction of the level typically seen in Munster during the 2010s, the report found.

The cost of room rentals has also risen sharply, with an average increase in Munster of 17% in the year to October 2022.

And rents paid by sitting tenants have also risen by 2.5% over the last 12 months.

Since rent pressure zones were introduced in 2016, rents of sitting tenants have increased by 17% on average, while an average increase of almost 75% was seen in open-market rents over the same period.

‘Grim’ outlook for renters 

Trinity College Dublin associate professor of economics and author of the Daft Report, Ronan Lyons, said the latest Rental Report contains “more grim reading for those hoping for an end to Ireland’s rental woes any time soon”.

“What has happened over the last 18 months has been an extraordinary collapse in the stock available to rent…Dublin — and the country — has gone into uncharted territory,” Mr Lyons wrote in the report.

“The extraordinary collapse in availability reflects a resurgence in demand since the darkest days of the covid19 pandemic in early 2021, as much as it does a fall in the flow of homes onto the market. 

The total number of rental homes put on the market, nationally, has fallen steadily over the last decade. In 2016, there were about 75,000 homes put up for rent over the course of the year. By early 2022, that had fallen to less than 50,000 — and in the last six months, it has fallen again to about 35,000. The best cure for high rents is supply.

Commenting on the report, Mr Lyons said: “Over the past 20 years, the best predictor of future changes in rents is the number of homes available at any particular point in time.

“As that has collapsed over the

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