Rate of rent inflation for sitting tenants roughly half that of new tenants

The rate of rent price inflation for sitting tenants is roughly half that of movers or new tenants, according to new figures from property website Daft.ie.

Based on bespoke data collated since 2017, the report shows that while market rents have risen by 38 per cent over the past five years, and more than doubled in a decade, rents for those who have stayed put are, on average, just 10 per cent higher now and about 40 per cent up on a decade ago.

In Dublin the gap in rent increases since 2017 between movers (at 28 per cent) and stayers (at 15 per cent) is smaller than in the rest of the country (50 per cent versus 6 per cent).

“But nonetheless, these substantial gaps across all markets raise awkward questions about the focus over the last few years by policymakers on protecting rents for sitting tenants,” said Trinity College economist Ronan Lyons, author of the Daft report.

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Mr Lyons said the only “real solution” was to increase the number of homes. “With more pressure from certain quarters to stop new rental homes being built, policymakers must hold their nerve,” he said.

The Daft report showed that annual rent price inflation rose to a five-year high of 11.7 per cent in the first quarter of 2022 as the supply of available properties slumped to a new low.

Just 851 homes were available to rent nationally on its website as of May 1st last, down 77 per cent on a year earlier and the lowest number since its series began in 2006.

According to Daft, the average monthly rent nationally stood at €1,567 in the first quarter of this year, up 11.7 per cent or €160 on the same period in 2021. The annual rate of inflation was running at just 1.2 per cent in the first quarter of 2021, when the country was subject to lockdown restrictions.

Just 64 homes were available to rent in Cork, Galway, Limerick and Waterford cities combined on May 1st, compared to more than 350 during 2019.

Availability

In Dublin there were just 462 homes listed for rent on March 1st, down 81 per cent on the same date a year earlier and by far the lowest level of availability since 2006.

Leitrim recorded the highest average annual rent increase in the first quarter, up 24.8 per cent to €817.

Donegal was next highest with a rise of 22.7 per cent, with Roscommon recording an increase of 21.6 per cent. The smallest annual increase was recorded in Dublin 20 at 5.6 per cent.

According to Daft, the 72 multi-unit rental developments that were active by May 1st – offering a combined 7,280 dwellings – had an occupancy rate of just under 96 per cent.

Some 18 new leases were started in these developments each week between November 2021 and May of this year, the report noted.