The DAFT report brought attention to several key trends in the Irish rental market for the second quarter of 2023. One of the striking aspects was the growing disparity between rental market trends in Dublin and those elsewhere.
While Dublin witnessed a mere 0.3% quarter-on-quarter increase in market rents, the report highlighted this as the second consecutive quarter of such subdued growth in the capital. This muted increase is in stark contrast to the rest of the country, where average rent increments between March and June amounted to a significant 4.3%. This was flagged as the second-highest quarterly surge outside Dublin since the initiation of the Daft Report in 2006.
This disparity was further underlined by the performance of other major cities in Ireland. Market rents increased across the board in cities such as Cork, Limerick, Galway, and Waterford.
However, a pressing concern reiterated in the report was the continued shortage of rental accommodation. Although there was a slight uptick in the number of homes available for rent recently, the overall number as of August 1st stood at less than 1,200. This represents an increase of over 460 compared to the same date in the previous year, yet is substantially lower than figures typical of the 2015-2019 period.
The DAFT report also shed light on rents paid by sitting tenants. Based on a tailored tenant survey, it was found that, over the last twelve months, rents for this group increased by 3.8%. Furthermore, the rise was more pronounced outside Dublin at 4.5% compared to 3.2% within the capital.
Commenting on these findings, the report’s author, Ronan Lyons, Associate Professor of Economics at Trinity College Dublin, drew attention to the divided market conditions. He noted that while the construction of new rental housing in Dublin, possibly combined with job losses in larger companies, has alleviated some market pressures, the imbalance between supply and demand remains more pronounced outside the capital. For instance, the Connacht-Ulster region witnessed a substantial rent hike of over 6% in just three months, resulting in an unprecedented annual inflation rate of 21.2%.
In terms of specific figures for Q2 2023, the average market rents and their year-on-year changes were as follows: