Updated: May 17, 2021
Thursday, 13 May 2021 -
Ireland's latest Rental Report (from Daft.ie) indicates a 2.1% average rise in residential rents nationwide as compiled for the first three months of 2021. This represents a steep rise from what the rent value was in Q4 of 2020.
The 2.1% represents an increase that implies today's national average for residential rent in Ireland stands at $1900. This figure is further up by 1.6% from the last three months of December 2020. The Daft report has also highlighted the tremendous change that has seen an increase of 100% from a monthly rental low of $960 as was the case a decade ago, pre-pandemic.
The Regional Variation
The residential rental average nationwide is denoted by 2.1%, but regionally, rent falls back to a monthly low of over 3% in some areas. The capital, Dublin, had a moderate rental rise of 1% in the last five months. However, this rental increase means prices are still lower compared to regions outside Dublin where increases of 2.9% have been recorded.
The growth in rental sales and prices represents the ongoing economic boom in Ireland, which is expected to attract international buyers from Asia and the US who are currently enjoying low interests and favourable exchange rates with the Sterling pound.
Between December 2020 and April 2021, for instance, regions such as Galway and Cork City have had a rental increase of 6% compared to a similar time last year. Beyond Ireland’s main cities, rents are 8% higher than a year earlier. However, the upsurge in residential rents isn't indicative of a shortage in the supply of rental homes nationwide. In Dublin, for instance, supply has been down from 90% in Q4 of 2020 to 20% in Q1 of 2021. Outside Dublin, the situation is more or less the same as supply has fallen consistently from Q4 2020 towards Q1 2021.
The Slump from The Pandemic
As noted by the chief economist of Daft Report, Covid-19 hit Ireland's real estate market at varying degrees based on locations, meaning Dublin and the main cities virtually went in different directions to the rest of the country. In Dublin, Galway, and cork, the rental supply grew temporarily stemming from the pandemic containment measures that restricted movement into the cities. Beyond that, the rest of the country has seen its real estate market nearly coming to a halt, apart from the few listings that have subsequently spurred rental prices further.
The Return to Normalcy
As expected, with the return to normal life in the upcoming months and beyond, the disparities are likely to disappear, although Irelands rental undersupply problem is anticipated to persist. This is expected to further increase the rental prices that will stem from higher interest pressures and the country's long-standing housing policy that hasn't found a solution yet. That is, the double figures of rental prices as seen in the last decade is proof that the problem isn't going away soon.