Important warning for tenants: Costs in major Irish cities explode, tenants branded as ‘solution’

As property prices soar in major Irish cities, including the capital, an IMPORTANT warning has been issued to renters.

The rental market has increased dramatically across the country and is 41 percent higher than before the Covid-19 crisis.

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As the latest rental report from Daft.ie shows, market rents rose by an average of 2 percent in the second quarter of 2024.

This is the fourth consecutive quarter that rents have increased nationwide and the 45th time in the last 48 quarters.

In the second quarter of this year, the average monthly rent on the free market across the country was 1,922 euros, an annual increase of 7.3 percent and an increase of 41 percent compared to the period before the outbreak of the Covid-19 pandemic.

The inflation rate of market rents in Dublin is still well below the national average.

In the capital, rents rose by 3.5 percent in the second quarter of this year compared to the same period last year; the national average was 10.6 percent higher.

Limerick City saw a strong year-on-year increase in the rental market, up 21 percent. However, there are also three Irish cities with double-digit increases, ranging from 13 percent in Galway to 10 percent in Waterford.

Outside the cities, the average growth rate was comparable, ranging from 9.3 percent in Munster to 10.5 percent in Connacht-Ulster.

The supply on the rental market is – as has been the case for years – still very limited.

Nationwide, just over 2,200 rental properties were available as of August 1, about half the average of 4,400 between 2015 and 2019 and essentially unchanged from the previous year.

Commenting on the report, Ronan Lyons, Associate Professor of Economics at Trinity College Dublin and author of the Daft.ie report, said: “Between mid-2022 and mid-2023, there was a slowdown in open market rent inflation, driven by Dublin and in particular the construction of a significant number of new rental properties in the Dublin area.

“However, as the very high inflation rates of market rents in other cities show, this trend remained limited to the capital, where the new supply was concentrated.

“This latest report suggests that even in Dublin the improvement in rental housing availability is stalling.

“Without new rental supply, it can be assumed that pressure on rents will increase in the future, making affordability even more difficult for people with regular incomes.

“The task for policymakers remains, first, to develop a comprehensive understanding of rental supply dynamics and, second, to develop detailed plans for dramatically increasing rental supply in all major rental markets over the coming years.”

He added: “Ideally, now that the rental housing shortage has existed for over a decade, we would be talking about a gradual spread of the solution rather than a return to the core problem.”

“The solution lies in a new supply of rental housing in large quantities in every single rental market in the country.”