Irish Rental Report Q3 2023 | Daft.ie

Ronan Lyons, Economist

13th Nov 2023

Supply, supply, supply

The rental market, according to the figures in this latest Daft.ie Report, has emerged slightly from its worst shortages of the post-lockdown period.

Between 2015 and 2019, there were typically close to 4,000 homes available to rent at any one time, with about 1,500 of those in Dublin. During the initial stages of covid19, availability went up in Dublin ‐ to almost 3,200, the highest since 2012 ‐ and it also went up in the other cities, while it was down slightly elsewhere.

During 2021 and into 2022, though, as society reopened, the number of rental homes available plummeted to new lows. Pre-covid19, the lowest level of homes available to rent in Dublin was 1,074 in May 2017, shortly after Rent Pressure Zones were introduced. But by August 2022, there were fewer than 300 homes on the Dublin market.

Elsewhere, the trend was very similar. A pre-covid low of just 242 homes to rent across all four other cities ‐ Cork, Limerick, Galway and Waterford ‐ gave way to there being regularly fewer than 100 homes to rent across four cities combined in 2022. And outside the cities, the low in availability post-covid (just 325 rental homes) was well below that seen pre-covid (almost 1,200).

Overall, and these things are often more obvious only in retrospect, things were at their worst in August 2022. At that point, there were only 716 homes on the rental market across the entire country. Thirteen years earlier, there had been 23,000 more homes available to rent ‐ although granted that was with a different set of challenges.

In the Q1 Daft.ie rental report this year, I wrote that the lack of availability was still a concern. On May 1st, there were just 959 homes available to rent nationwide. The only positive signal was that this was a 12% increase in the same date a year earlier.

Then came the Q2 Daft.ie rental report, in August. At that point, there were almost 1,200 homes available to rent ‐ a 64% increase on the same date a year previously.

And now with this Q3 Daft.ie rental report, it is possible to state that the recovery in availability continues. There were almost 1,800 homes available to rent on November 1st, again a 64% increase compared to the same date a year previously.

The Number Of Available Rental Homes In Ireland Is Under 1800

There have now been seven months during which availability of rental homes has improved year-on-year and for the last four of those months, the rate of improvement has been substantial (over 60%) and relatively steady.

But there are two important caveats to this sliver of good news. The first is that, by any objective measure, having just 1,800 homes on the rental market for a country that has, as of the April 2022 Census, at least 330,000 households in the private rental market is far too little.

The market was tight, and rents rising, during 2015-2019 when there were well over twice as many homes to rent at any one time as there are now. So 1,800 is not nearly enough. If there's a magic number, it's probably closer to 6,000.

The other caveat is that the improvement in rental market conditions is concentrated in Dublin. The figure accompanying this piece shows the change in availability across each of four major regions, between November 1st last year and the same date this year.

Change In Homes Available To Rent Nov 2022 Compared To Nov 2023

More homes available to rent puts less upward pressure on rents. Given what is happening in Dublin ‐ and what is not happening elsewhere ‐ it is unsurprising that the ease-off in rental inflation is, at least at the moment, concentrated in the Dublin area.

While rents have risen in Munster by 10% since the start of the year, and by nearly 13% in Connacht-Ulster, they have risen by just 1.3% in Dublin.

Rents Have Increased By 8% In One Year

Proof, if it were needed, that the answer to Ireland's rental market woes is, as it has been for the last decade... supply, supply, supply.