The rental supply crisis is set to worsen as Ireland’s “starved” housing stock dips below 2,000, its lowest in more than three years.
That is according to the latest rental report from property website Daft, which indicated there were just 1,901 homes available for rent in the entire country at the start of the month and the number of rooms rented is down 7 per cent year on year.
Following a rebound in housing stock in the aftermath of the pandemic, a return to the tightening of supply in the past year has seen housing availability hit just 44 per cent of the stock seen across 2015 to 2019.
The lack of available housing has precipitated further rent inflation, with the average monthly rent of a two-bedroom apartment reaching €2,080 in the past three months. In Dublin it has risen 6.5 per cent to €2,583.
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The national inflation rate in the first nine months of the year was 4.3 per cent, which is broadly in line with trends across the past two years, according the report’s author, Ronan Lyons, a professor of economics at Trinity College Dublin.
“While it’s a small win, steady inflation below 5 per cent is – given recent increases – an improvement,” he said in the report. “However, supply remains tight – and indeed worsening, with one quarter fewer homes available to rent on the 1st of November than a year before. Thus, upward pressure on rents is likely to remain.”
He further noted that the “sharp fall” in the housing stock will increase rents moving forward and described the market as “starved of supply”.
“While it will take years, significant amounts of new rental supply – all around the country – are required to change conditions in the rental market.”
Dublin, however, is experiencing less rental price inflation than the rest of the country. While the State’s other four cities are seeing inflation in excess of 10 per cent, with a rate above 5 per cent nationwide, Dublin has seen just 2.7 per cent rent inflation in the year to date.
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This is due to new rental properties that came on stream in the capital in 2023, Mr Lyons said, while the rest of the country is seeing markedly higher increases in average rent.
Waterford city has seen the largest increase in rents year on year, with the cost of renting an average two-bedroom apartment jumping up 11.4 per cent to €1,490 per month.
The recent increases mean that the national average home rent is now 33 per cent higher than it was in the pre-Covid period, and 67 per cent higher than during the Celtic Tiger peak.
Average room prices, informed by data from Daft.ie listings, has also increased nearly across the board.
The most expensive rooms in the country are double-room en suites in Dublin apartments, topping the list at an average rent of €1,145, up 2.5 per cent year on year; their equivalents in houses are slightly cheaper at €1,020.
The cheapest room rentals in the capital have risen to €752, single rooms without en suite bathrooms. This contrasts with €610 in the other four cities, and €523 in the cheapest area, the rural parts of Connacht and Ulster.
Rental prices, Mr Lyons said, “have increased at record rates in the 2020s” across homes and room rentals as a result of acute pressure on the market since the outbreak of Covid-19 in early 2020.
