Published on August 22nd, 2017 | by Martin Clancy
Rents rise as supply plummets
Rents rose nationwide by an average of 11.8% in the year to June 2017.
The average monthly rent nationwide during the second quarter of 2017 was €1,159, the fifth quarter in a row a new all-time high has been set. The rate of inflation represents a slight slowdown in inflation from the rate recorded in the first quarter of 2017 (13.4%), which was the second largest on record.
In Dublin, the increase in rents in the year to June 2017 was 12.3% and rents in the capital are now over 18% higher than their previous peak in 2008, or €260 a month. In Cork, rents rose by 6.8% in the year to June, the slowest rate of inflation since early 2014, while in Galway, rents were 10% higher than a year previously, the eleventh straight quarter of double-digit increases in the city. In Limerick city, rents rose 10.8% in the last year, while in Waterford the increase was 8.4%. Outside the cities, rents have risen by 11.9%.
There were just 2,930 properties available to rent nationwide on August 1st. This is the lowest number ever recorded, in a series that starts in January 2006, and the first time ever that fewer than 3,000 homes were available to rent. In Dublin, there were just 1,100 homes available to rent, compared to 2,000 on the same date in 2014.
Commenting on the report, Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said: “The start of the academic year in September traditionally meant that July and August are two of the busiest months for the rental market each year. In the last two years, however, there has been no summer rush of properties to rent. In a market with such chronically deficient supply, it is therefore unsurprising to see rents reach a new high.
“While rent controls may help sitting tenants, they make the market even tougher for those looking for a new home. The rental market remains in severe distress due to a lack of supply and thus the appropriate policy response is to boost supply of all forms. This includes purpose-built student accommodation. Based on demographics and other factors, Dublin alone needs a block of 300 student beds approved every month until the late 2020s.”
Katie Ascough and Kevin Keane, Presidents of UCD and TCD Students’ Unions, stated:
“Over 50,000 Leaving Cert graduates from the class of 2017 are now looking for a place to stay before September. The lion’s share of that group will be seeking accommodation in Dublin, Cork and Galway – the most competitive areas of a housing market in crisis. A cursory glance at the available data shows the challenge awaiting them. Major collective action from a range of stakeholders is necessary to help these young people and we’re thankful to Daft for being involved in an initiative with us which is aimed at alleviating the situation.”
Year-on-year change in rents, Q2 2017
- Dublin: €1,707, up 12.3%
- Cork: €1,122, up 6.8%
- Galway: €1,026, up 10.0%
- Limerick: €919, up 10.8%
- Waterford: €772, up 8.4%
- Rest of the country: €824, up 11.9%
The full report is available from www.daft.ie/report and includes a commentary by Katie Ascough and Kevin Keane, Presidents of UCD and TCD Students’ Unions, as well as an analysis of affordability and statistics on residential yields around the country.