Rental prices hit new all-time high as supply drops to lowest level on record
LOCATION price increases have reached a record high, with supply at its lowest level since Daft.ie records began in 2006.
The cost of accommodation jumped 12.6% in the three months to June compared to the same period last year, according to Daft.ie’s asking price survey.
This is the highest level of rent inflation since Daft began compiling the rent index 16 years ago.
The average monthly asking price reached €1,618 due to a chronic shortage of supply, with small owners leaving the market in droves.
There were only 716 homes available for rent on August 1.
The average monthly asking price for a new rental in Dublin is now €2,170.
The survey focuses on the prices charged for new rental contracts. Most of those in existing rentals will not have had the same level of increase.
However, asking rental prices rose 3.3% in the first three months of the year, according to Daft.ie.
The annual rent inflation rate of 12.6% is higher than the previous peak of 11.8% recorded at the end of 2016. It comes as figures released this week show small landlords leaving the market in record numbers.
The number of termination notices issued by landlords to tenants, as notified to the Residential Tenancies Board (RTB), increased by 58% in the first six months of 2022.
Most intend to sell. Rising interest rates, high real estate prices, and complaints about regulations and taxes are cited as the reasons why so many smallholders are selling.
Daft.ie said statewide there were just 716 homes available for rent on August 1.
Asking rental prices, at €1,618 per month, have now more than doubled from a low of €765 per month in 2006.
Dublin saw an annual rental asking price rise of 12.7% in the second quarter. That’s above the national average for the first time since 2018. Cork, meanwhile, has seen annual asking price increases of 11.8%. Galway saw a price spike of 16.4pc, with asking prices up 17.7pc in Limerick.
Outside cities, average annual increases increased by 12%.
Daft.ie rental report author and associate professor at Trinity College, Ronan Lyons, said housing scarcity was unprecedented over the past year. The 716 units available for rent as of August 1 were down from nearly 2,500 a year ago.
And this is a new historic low since Daft took stock of the rental supply in 2006.
Rental availability is now down nearly 100pc since 2009.
Professor Lyons said: “A resurgent economy over the past year has accentuated the chronic shortage of rental accommodation in Ireland.
“While the professional rental sector has added more than 7,000 new rental units over the past five years, this is small compared to the fall of 30,000 rental listings each year in the traditional rental sector over the same period. , or the drop of 100,000 ads per year since 2012.
He said the shortage of rental housing translates directly into higher rents in the market and this can only be solved by increased supply.
Professor Lyons said there were almost 115,000 rental properties on offer in the pipeline, but these are concentrated in the Dublin area.
“While nearly 23,000 are under construction, the rest are earlier in the process and growing legal challenges to new developments present a threat to addressing the rent shortage.”
Monthly rent in Dublin is up 12.7% to €2,170, Daft.ie said.
In Cork, the average asking price is €1,670, while it is €1,663 in Galway. Average asking prices in Limerick are €1,600 and the average is €1,312 in the city of Waterford.
In the rest of the country, the average annual asking rental price is up 12% to €1,255.
Figures released to Sinn Féin’s Eoin Ó Broin by the RTB show 1,781 tenants received eviction notices between April and June this year, more than double the amount in the same period last year (841) .
Mr Ó Broin said that “a chronic shortage of social housing” coupled with the growing number of private landlords leaving the market “is contributing to the homelessness crisis”.
Focus Ireland is also calling for urgent government action in the budget to stem the exodus of landlords from the market. She proposed a scheme that would allow homeowners to rack up deep tax breaks on their income in exchange for a commitment to stay in the market.
Advocacy Director Mike Allen warned that without such a program “the level of homelessness will continue to rise beyond the ability of homeless organizations to address it”.