The spiralling cost of renting a home in Dublin city has forced many people to look farther afield, with tightening supply leading to sharp increases in commuter belt counties over recent months, new figures from the Residential Tenancies Board (RTB) show.
While year-on-year rent increases in the capital eased back slightly towards the end of 2017 – down from 8 per cent in the third quarter to 5.2 per cent in the last three months of the year – the Greater Dublin Area, including Cos Meath, Wicklow and Kildare, saw the rate of increase go in the opposite direction, jumping from 4.8 per cent to 7.5 per cent.
The RTB put the standardised national average rent for new tenancies at €1,054 over the last three months of 2017, up from €990 across the same period in 2016. The increase of 6.4 per cent represents a slowdown compared with the third quarter of last year when the rate of increase was 8 per cent.
The average rent in Dublin city was put at €1,511, up from €1,436 a year earlier, while in the Greater Dublin Area (GDA) – excluding the city – average rents were said to be €1,103, compared with €1,026 a year earlier. Outside the Dublin area, average rents were €793 compared with €740 a year previously.
Quarterly growth
The quarterly growth rate in rents for Dublin is at a five-year low, down from 2.3 per cent over the third quarter to 1.1 per cent in the last three months of the year but the rate of increase across the Greater Dublin Area in the same period went from 4.8 per cent to 7.5 per cent, the highest quarterly rate increase since 2016.
The fourth quarter data showed four counties – Dublin, Kildare, Meath and Wicklow – with average monthly rents exceeding €1,000.
"The continued strong economic and demographic growth combined with restricted supply continues to put pressure on the rental market and those seeking a place to live," said Rosalind Carroll, director of the RTB. "We see that, in the 6.4 per cent annual increase in new rents to the end of quarter four, 2017".
However, she pointed out that the rate of increase has slowed from the previous quarter and the last time the annual growth rate in new rents were below this level was in quarter one, 2014.
“The report shows that in the Dublin rental market rents continue to increase; however, the quarter-on-quarter growth rate, at 1.1 per cent, has slowed compared to the previous quarters,” Ms Carroll said. Within the figures published today we can see some sense of the pressure on rents in Dublin rippling out to the wider GDA,” she added.
She pointed out that the Rent Index was based on new tenancies and did not reflect “what is happening within existing tenancies. Some of the new tenancies will be properties new to the rental market and therefore are exempt from the 4 per cent rent restrictions of the Rent Pressure Zones (RPZs). Further reports and data will provide additional insight into the impact of the RPZs and their impact on the rental market.”
The new figures prove rent controls are not working and the Government needs to deal more urgently with supply-side issues, according to the Institute of Professional Auctioneers & Valuers (IPAV).
Pat Davitt, chief executive of IPAV, said that although the index had shown a slowing rate of growth, "it is continuing growth in rents nonetheless and increasing growth in commuter counties".
