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Dublin rental supply ‘going in right direction’

The latest report from property website Daft.ie shows that the average listed rent increased at an annual rate of 10.7% in the second quarter of this year.

Although this was a slower rate of growth than the 14.1% recorded in the same period last year, it still represented the seventh consecutive quarter of double-digit percentage increases.

The report shows that rents are rising more quickly outside Dublin – there was an increase of just 0.3% in the capital during the three-month period, compared with 4.3% elsewhere.

Overall, rents rose by 2.4% during the quarter – the second-smallest quarterly increase in the last two years.

The average monthly rent was €1,792.

Optimism and pessimism

The report’s author, economist Ronan Lyons (pictured), said that there were reasons for optimism and pessimism in the report.

He pointed to an increase in supply in Dublin, where there were more than 100 homes available to rent in the city centre on 1 August, compared with just 23 a year earlier.

“That is still far too low for a city of Dublin's size and economic importance – even during 2015-2019, when the market was starved of rental accommodation, there were typically almost 300 homes to rent. But it is at least a trend in the right direction,” he stated.

Lyons warned, however, that the increase in supply elsewhere was less noticeable, with only seven homes available for rent in both Limerick and Waterford cities.

Policy interventions

The economist said that only in Dublin has new supply had any chance of offsetting the loss of homes caused by landlords exiting the market.

“The good news is that the close-to-stable rents being seen in Dublin at the moment are at least in part another exhibit in the long list of evidence that supply is the solution to a supply shortage and to high prevailing rents,” Lyons said.

“The bad news, however, is that costs are prohibitively high for standard private rental accommodation to be built anywhere outside of Dublin for the foreseeable future,” he continued, warning that policy interventions would be needed to address this “for years to come”.