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New DAFT report offers hope for Ireland’s struggling rental market

For over a decade, Ireland’s rental market has been plagued by worsening availability and soaring rents. However, a recent report offers some encouraging signs for those concerned about the health of the rental market. Despite a rapid increase in demand during 2021 and 2022, the rate of new rental homes coming onto the market has been the fastest in almost two decades.

In the second half of 2022, almost 5,350 landlords gave notice of termination to sell their properties. While these properties are unlikely to stay in the rental segment, new developments in Dublin contributed to a significant increase in registered tenancies during the same period. Between July and December 2022, the number of registered tenancies in new developments effectively doubled from 1,270 to almost 2,600.

However, the report also highlighted that the rental market is still struggling, with Dublin treading water while the rest of the country lost about 4,000 rental homes in six months. The government’s policy has shifted from encouraging new entries into the rental market to discouraging exits. While this is an understandable response to a chronic situation, the report suggests that the long-term solution lies in encouraging new entries into the rental market through planning and zoning reform and targeted reductions in construction costs.