There are few signs of improvement in the key trends in the latest quarterly update from the Residential Tenancies Board (RTB)– and some concerning findings. It remains clear that problems in the rental market are at the centre of the housing crisis and that key issues need to be faced. Among these is agreement on a longer term view of the role of rental in the housing mix and how it relates to home ownership.
The findings do show a small 0.1 per cent quarterly decline in the cost of new tenancies in the final three months of 2024. However, rents remain 9.1 per cent higher than one year earlier, with particularly large rises outside the Dublin region, where supply appears particularly constrained.
With rents in new tenancies averaging just under €1,600 across the State and close to €2,100 in Dublin, many people remain priced out of the market. Rents in existing tenancies remain lower – by about 16 per cent on average – and have not grown as fast due to rent pressure zone rules. But they remain at levels which leave many households struggling and unable to save.
Perhaps the most concerning sign is the fall in the number of new tenancies. There were 11,895 registered in the final quarter of last year, a 30 per cent drop on the last three months of 2022. There has been a sharp fall-off in new tenancies since the second quarter of last year – and predictably this has coincided with a rise in rental inflation.
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A clear sign that the market is not working is that despite higher rents being on offer, new private landlords are not entering the market. Meanwhile, data from estate agents suggests that many existing landlords are selling up. Rents may be at record highs, but still the private rental market is being hollowed out, while many larger new developments are out of the reach of those on average incomes.
In policy terms, striking the right balance between protecting existing tenants and attracting in new landlords is not easy. But there are clearly issues here which need to be addressed, alongside the wider and ongoing imperative of continuing to increase housing supply.