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Rent prices in Ireland fall for first time in over seven years

Ronan Lyons, economist at Trinity College Dublin and author of the Daft report, said a rent freeze is not a quick fix to the housing crisis.

(Yui Mok/PA)

Rent prices in Ireland have fallen for the first time in more than seven years, although figures in Dublin continued to rise.

According to the latest quarterly rental report by Daft.ie, rent fell 0.1% in the final three months of 2019, the first time since mid-2012 that rents have not risen quarter-on-quarter.

The annual rate of inflation in rents for 2019 was 4.1%, again the lowest since 2012.

The average monthly rent nationwide was 1,402 euro in the final quarter of 2019, 659 euro higher than the low seen in late 2011.

The late-2019 trends differ across urban and rural parts of the market.

In Dublin, Cork and Galway cities, rents rose between September and December, while outside the major cities, figures fell on average. Year-on-year trends were more similar.

Compared to the end of 2018, rents in Dublin at the end of 2019 were 3.5% higher, and in Cork and Galway the numbers were 5.5% higher.

In Limerick and Waterford cities, rents were 3.9% and 4.3% higher respectively than a year ago.

Outside the cities, rents were 4.7% higher in late 2019 than the year before.

The number of homes available to rent nationwide continued to rise, albeit from a very low base.

Despite the desire for a quick fix, such as rent freezes, no such quick fix existsRonan Lyons

There were 3,543 properties available to rent across the country on February 1, up 10% from the 3,216 available the same date a year ago.

While this marks the 17th time in the last 19 months that availability has improved year-on-year, the number of rental homes on the market is still down 80% from its 2009 peak.

Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, said: “With the election of a new government, housing – and in particular the rental sector – are likely to be key parts of the new government’s priorities.

“Despite the desire for a quick fix, such as rent freezes, no such quick fix exists.

  • Dublin: 2,052 euro, up 3.5%
  • Cork: 1,386 euro, up 5.5%
  • Galway: 1,309 euro, up 5.6%
  • Limerick: 1,217 euro, up 3.9%
  • Waterford: 1,010 euro, up 4.3%
  • Rest of the country: 993 euro, up 4.6%

“By worsening insider-outsider dynamics, rent freezes are likely to further harm those most affected by the shortage of accommodation.

“If somehow applied to newly built rental homes, rent controls could prove calamitous for a country that desperately needs new rental homes but has very high construction costs.”

Stephen Faughnan, chairman of the Irish Property Owners’ Association (IPOA), said: “The increase in the supply is essential and a very positive development.

“However, rent pressure zones are a blunt instrument and do not take into account the level of rent being charged or the indebtedness of a landlord, making it uneconomical for some landlords to continue renting property.

“A rent freeze will not help the sector.

“The state needs to protect the existing supply of accommodation by introducing a mechanism to increase rent where it is substantially below market rate, as well as incentivise further investment in the sector.”

PA