Average monthly cost of renting Dublin home passes €2,000

The average monthly cost of renting a home in Dublin has breached the €2,000 mark for the first time, new figures suggest

While rent inflation has slowed dramatically over the last year, ongoing supply issues mean many remain priced out of the market.

Rents rose by an average of 6.7 per cent nationwide in the 12 months to the end of June with the average monthly cost of renting a home now almost €650 more than it was in late 2011, the latest quarterly rental report published by property website Daft.ie says.

The 6.7 per cent increase marks the lowest rate of rental inflation since the final quarter of 2013. However the slowdown has more to do with affordability thresholds being reached, than any increase in supply impacting spiralling rent, according to Trinity College economist and report author Ronan Lyons.

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The nationwide average monthly cost of renting at the end of June was put at €1,391, €361 higher than the previous peak in 2008 and almost €650 higher than the low seen in late 2011.

The recorded slowdown has been driven by prices in Dublin, where year-on-year inflation has fallen from a high of 13.4 per cent in mid-2018 to 4.5 per cent now.

While the slowdown is pronounced, the increase still takes the average monthly cost of renting a home in Dublin to €2,023.

Nationwide

In Cork the average was €1,366 up 7.9 per cent, in Galway it was €1,297 up 9.1 per cent, in Limerick it was €1,225, up 10.5 per cent, while Waterford recorded a 10 per cent increase to €1,013.

“Building new rental supply remains critical to fixing the rental market,” Mr Lyons said.

Mr Lyons pointed out that, in Dublin, there were just 1,541 properties available to rent on August 1st, up from 1,121 two years ago but well below the average of 4,700 for the preceding decade.

“The slowdown in rental inflation will be welcome news to tenants and policymakers, among others,” said Mr Lyons.

“It is more likely driven by limits to affordability than improved supply, however. Availability on the rental market remains at levels that were unprecedented prior to 2015.”

“New figures in this report suggest that up to 25,000 new rental homes will be built over the coming few years. These will certainly help address the supply-demand imbalance.

“Stopping further inflation should be just the first target for policymakers, however. Bringing rents down to affordable levels must remain the ultimate goal,” he concluded.

Commenting on the report, Daft.ie spokeswoman Raychel O’Connell said “students, young professionals and families alike continue to have great difficulty in securing rental accommodation”.

She pointed out that for the 13th quarter in a row “we have seen unprecedented high rents across the country. With rents at a record high and availability at a record low it is clear that supply is needed more than ever in the Irish property market.”