Average nationwide rent surpasses €2,000 a month amid ‘worsening shortage' of supply
This is up from a low of €765 in 2011 and 48pc higher than before the Covid-19 pandemic.
Market rents in Ireland saw one of the largest three-month increases in the last two decades in the first quarter of this year, rising by an average of 3.4pc.
Rents rose 7.3pc nationally year-on-year up to March, which is in line with the average rate of inflation over the last 18 months.
In the year to March, market rents rose by 5.8pc in Dublin, its highest rate of inflation since mid-2023.
Rents elsewhere rose by 8.6pc, marking the smallest gap in inflation rates between Dublin and the rest of the country in two years. Pressure on rental markets in Ireland's other cities remains acute.
In Waterford, market rents in March were up 9.9pc year-on-year, while in Cork and Galway cities, they were up 13.6pc and 12.6pc, respectively.
Once again, Limerick has seen the largest increases, with rents up over 20pc year-on-year.
Outside the major cities, rents in Leinster, Connacht and Ulster were up just over 5pc year-on-year, while rents in Munster were 11.5pc higher.
There were just over 2,300 homes available to rent nationwide on May 1, down 14pc year-on-year. This is the third lowest total for May in 20 years and close to half the 2015-2019 average for availability of homes to rent.
It is also the third quarter of falling availability, following six quarters of improving stock.
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The report's author Ronan Lyons, a professor in economics at Trinity College Dublin, said rent increases are 'driven by an acute and worsening shortage'.
He emphasised that the open-market rent nationwide now exceeds €2,000 a month 'for the first time', up from below €1,400 a month just five years ago.
'Unfortunately, changes made to rent controls in 2021 dramatically reduced the ability of Ireland's rental sector to attract the capital needed for new supply, the ultimate remedy for the shortage,' he said.
The report also showed that on average, rents for sitting tenants have increased by 3.1pc each year over the last decade, compared with 8.5pc for market tenants during the same period.
Sitting tenants in Dublin have seen a greater share of this increase (3.8pc) per year, than their counterparts elsewhere (1.2pc).
Prof Lyons said the opportunity exists for 'long-overdue' reform of Rent Pressure Zones to facilitate the emergence of a new pipeline of rental homes.
'Aligning the system here with standard practice in other places with rent controls – in particular by allowing for rents to reset when tenants leave but also by reviewing the limit on increases allowed – will benefit tenants in the long run, as a new pipeline of supply will emerge,' he said.
'The longer it takes to get to that new system, however, the longer we will have to read about chronic shortages of rental homes and sharp increases in market rents.'
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