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Supply issues return as rent rises accelerate

Rents across the country rose at their fastest rate since mid-2019 in the second quarter of this year, according to the latest report from property website Daft.ie.

The company also said that the number of homes available to rent on 1 August this year was just 2,455 – the lowest number on record.

The report’s author, Trinity College Dublin economist Ronan Lyons, says that “the old problem of a lack of rental supply” appears to be re-emerging as COVID-19 disruption begins to subside.

Small Dublin increase

Rents in the three months to the end of June were 5.6% higher than in the same period a year earlier. This represents an acceleration from the 1.7% figure in the first quarter of 2021.

The report shows some big differences between regions, however, with Dublin rents up just 0.5% from a year earlier.

Elsewhere in the country, rents are increasing at double-digit rates. In Munster, outside the three main cities, rents are 14% higher than a year ago, while in Connacht-Ulster, they are 15% higher.

Daft.ie says that the low number of homes available to rent contrasts with the average of 9,300 over the past 15 years.

Tight supply

Lyons points out that even during the 2015-2019 period, when supply was very tight, there was an average of almost 3,900 homes available to rent.

The 1,666 homes available to rent in Dublin on 1 August is, however, above the figure seen on the same date two years earlier and roughly in line with the 2015-2019 average. Outside Dublin, there were just 789 homes to rent in total.

“The hope for renters and for Irish society is that August will mark the low-point – as has been the case in other years and reflecting the timing of leases for the academic year,” says Lyons.

“But the underlying pressure on Ireland's rental system is intense and the supply shortages are chronic and worsening.”

The economist adds that what he describes as “simplistic” rent controls will, at best, only hide the problem.