The Daft Rental Price Report for Q4 2023 reveals a nuanced picture of the Irish rental market, with a notable deceleration in rent increases across Ireland compared to the previous years and a significant disparity between the capital city, Dublin, and the rest of the country. Specifically, the report documents an average rent increase of 6.8% in 2023, a reduction from the 13.7% rise in 2022 and the 10.3% in 2021. In Dublin, the increase was markedly lower at just 2.6%, reflecting the impact of new supply entering the market. Conversely, outside the capital, rents climbed more steeply, averaging a 10.6% increase, with certain areas experiencing even higher growth rates. Authored by the DAFT team with key insights from Ronan Lyons, Associate Professor of Economics at Trinity College Dublin, the findings underscore the complex interplay of supply and demand dynamics across different regions.
Key Insights from the Report:
Ronan Lyons provided commentary on the significance of these findings, attributing the stagnation of rent inflation in Dublin primarily to the influx of new rental homes over the past two years. This situation illustrates the basic economic principle that increasing supply is key to meeting strong rental demand. However, Lyons highlighted the almost complete absence of new rental accommodation construction outside Dublin, combined with the expected slowdown in Dublin’s rental project pipeline. This imbalance raises concerns about the future health of the rental market across the country, underscoring the urgent need for policy interventions aimed at increasing rental housing supply both in and outside of Dublin.
The city-specific data for average market rents and year-on-year changes in Q4 2023 further illustrate the regional disparities within the Irish rental market: