Dublin’s rental market breathes a sigh of relief as new housing stock brings a semblance of stability, contrasting starkly with the relentless ascent of rents elsewhere in Ireland. The latest insights from Daft.ie’s Rental Report unveil a nation at a crossroads, with the average market rent climbing by 6.8% through 2023. This marks a notable deceleration from the dizzying heights of 13.7% in 2022 and 10.3% the year before. The final quarter of 2023 saw the average rent nationwide touching €1,850 per month, a significant leap from the €1,365 monthly rate witnessed at the dawn of the COVID-19 era in early 2020.
The narrative shifts dramatically within the confines of Dublin. The capital’s market rents nudged up by a mere 2.6% over the year, a stark contrast to the 10.6% surge recorded outside its boundaries. Cork and Waterford cities found themselves entangled in the web of escalating rents, with increases ranging between 7% and 8%. Galway and Limerick cities bore the brunt of even steeper climbs, witnessing 11.3% and 14% hikes, respectively. The disparity extends beyond urban centres, with Dublin’s commuter belt experiencing a relatively modest 7.5% uptick, while the Ulster counties grapple with nearly 17% inflation, marking the highest regional spike.
This tale of two Irelands is mirrored in the availability of rental accommodations. The period between October 2022 and December 2023 saw a national uptick of 937 rental homes, 80% of which were concentrated in Dublin. The capital’s boon in housing supply has been a crucial factor in tempering rent inflation. As of February 1st, the nation counted just over 2,200 rental units up for grabs, marking an 11th consecutive month of year-on-year inventory growth.
However, the reprieve in Dublin’s rental market casts a long shadow over the rest of the country, where the drumbeat of demand outpaces the trickle of new developments. Ronan Lyons, a leading economist from Trinity College Dublin, underscores the pivotal role of new construction in quelling rent hikes. “The near-disappearance of inflation in market rents in the capital underscores the efficacy of supply in meeting demand,” Lyons remarks. Yet, the stark absence of new rental projects outside Dublin paints a grim outlook, with Lyons cautioning against an imminent downturn in Dublin’s rental supply amid ongoing challenges.
As the narrative unfolds, the dichotomy between Dublin’s stabilising rents and the relentless rise elsewhere lays bare the pressing need for a cohesive national strategy. With policy actions looming on the horizon, the quest for equilibrium in Ireland’s rental market continues, underscored by a stark reminder: the supply-demand dynamic remains an unforgiving arbiter of affordability and availability in the housing sector.