Rental Boom: Ireland's Q2 Sees a Significant 10.7% YoY Surge in Residential Rents

According to the latest Rental Report by Daft.ie, Ireland's residential market rents in the second quarter of 2023 rose by an average of 2.4% compared to the first three months of the year. This increase, however, pales in comparison to the staggering 10.7% rise in rents when compared to the same period a year ago. With the average market rent nationwide standing just under €1,800 per month, it is evident that the cost of renting in Ireland is steadily climbing.

The disparity in rental trends between Dublin and other regions of Ireland is quite noticeable. In the capital, market rents experienced a mere 0.3% increase quarter-on-quarter, marking the second consecutive quarter of muted growth. However, it's a different story outside Dublin, as the average rental increase between March and June reached an impressive 4.3%. This figure represents the second-largest quarterly increase recorded outside the capital since the beginning of the Daft Report in 2006. 

While Dublin may be experiencing a slowdown in rent inflation thanks to the construction of new rental housing and potential layoffs affecting demand, the rental market landscape in other parts of the country remains challenging. The lack of new rental homes has created an imbalance between supply and demand, resulting in substantial rent hikes. In fact, in Connacht-Ulster, rents surged over 6% in just three months, pushing the annual inflation rate to an all-time high of 21.2% since the series began in early 2006.

The shortage of rental accommodation in Ireland continues to be a pressing issue, despite a slight increase in available homes to rent in recent months. As of August 1st, there were slightly over 1,200 homes available for rent nationwide. While this marks an improvement of over 460 homes compared to the previous year, it remains clear that the availability of rental properties remains extremely tight when compared to previous years. In fact, the number of homes on the market is less than one third of what was typically available between 2015 and 2019, a period already characterized by scarcity. 

The Daft Rental Report not only provides insights into open-market rents but also includes an index of rents paid by sitting tenants. Over the last twelve months, rents paid by sitting tenants have increased on average by 3.8%. Notably, the percentage increases outside Dublin (4.5%) exceeded the rate of increase within the capital (3.2%). This disparity signifies varying market conditions across Ireland, with the abundance of supply in Dublin influencing rent growth differently from the shortage experienced in other regions. 

In terms of average market rents and year-on-year changes, here is a breakdown for the second quarter of 2023: