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The rise in rental prices has slowed in Ireland in early 2024


Real Estate

rise in rental prices slowed in Ireland

According to the latest Daft.ie data, in the first quarter of 2024, rental prices in the residential market rose by an average of 0.6%.

Rents have been rising for thirteen quarters, but the increase from December to March is the smallest in that period. In Q1 of this year, the average monthly rent nationwide was €1,836, which is a 4.9% increase compared to last year.

Dublin is the main cause of the rental inflation drop from a peak of 14% in the middle of 2022. Market rents in the capital increased by 2.5% in the first quarter compared to the same period last year. However, rental inflation has also decreased in other regions; outside of Dublin, average increases have been 7.2% annually. Rent in Waterford and Cork cities increased by 6.9% and 8% respectively, while rent in Galway city increased by 5% year over year. On the other hand, market rent hikes in Limerick City were 17.5% year over year, among the highest nationwide.

There are still not many houses on the open market that can be rented. On May 1st, there were just over 2,000 houses available for rent, which is significantly less than half of the average from 2015-2019 and about the same as the previous year. Availability decreased a lot since the start of the year, but it increased nearly four times from late 2022 to late 2023.

Ronan Lyons, an economics professor at Trinity College Dublin, believes that the construction of many new rental homes in the Dublin area has contributed significantly to the recent decrease in rental inflation over the past 18 months. Increased supply, even at the top end of the market, alleviates pressures on the market as a whole. Specifically in the second half of 2023, new supply improved availability and reduced inflation.

However, Lyons added, it appears that progress in increasing the number of rental properties is at a standstill. If there aren't any more increases in the number of available rental units, rent pressure is probably going to be upward, making it more difficult for people on regular wages to afford. Before creating a plan to increase rental supply in the coming years, policymakers need to understand the factors that affect rental supply.


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