Rents for new tenancies outside the Greater Dublin Area (GDA) increased by almost twice the rate as those in Dublin at the end of last year, with the switch to remote working and people moving outside the capital following the Covid-19 pandemic contributing to the trend.
On Thursday, the Residential Tenancies Board (RTB) published its rent index for the final quarter of 2023, which found homes outside the Greater Dublin Area (GDA) experienced their highest annual growth on record during this time.
According to the report, the national standardised average rent in new tenancies stood at €1,595 per month in the final three months of last year – a decrease of €1 per month compared to the previous quarter. This represents a rise of 9.1 per cent annually.
For existing tenancies, the national standardised average rent was €1,374 per month at the end of last year – a 5.9 per cent annual increase.
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The data shows a marked variation in rent increases for new tenancies, depending on location. Counties outside the GDA – not traditionally known as big rental markets – have seen a significant but continued rise in new tenancy rent prices in recent years.
For new tenancies in Dublin, the standardised average rent was €2,098 per month in quarter four. For new tenancies in the GDA excluding Dublin, rent was €1,569, while outside the GDA, it was €1,225.
Annually, rents in new tenancies grew by 6.5 per cent in Dublin. The year-on-year increase for new tenancies outside the GDA was substantially larger than that, at 12.6 per cent.
The rate of rent price growth also varied depending on accommodation type. For homes, new tenancy rents for houses in the capital grew by 7.3 per cent, while those outside the GDA saw a rise of 13.8 per cent – its highest increase on record.
For apartments, new Dublin rents grew annually by 5.9 per cent, compared to 10.6 per cent outside the GDA.
Researchers in the sector have said the increasing cost of new tenancy rents outside Dublin is a consequence of the move to remote working, which has allowed many previously Dublin-based employees to move outside the capital, increasing rental demand elsewhere around the country.
The county with the fastest growing average rent in new tenancies during the period examined was Limerick which reported a 25 per cent year-on-year growth, followed by Cavan where rents in new tenancies increased by 20.9 per cent year-on-year.
There also continued to be a difference in rent paid between new and existing tenants, with new tenancy rents being 16.1 per cent higher than existing tenancy rents in quarter four.
Sligo had the largest difference in the cost of rent between new and existing tenancies at 36 per cent (€300 per month), while Louth had the smallest difference at 11 per cent (€126 per month).
The RTB said the existing tenancy rent index cannot be used to measure compliance by landlords with rent-pressure zone (RPZ) price increase caps as it also includes properties outside RPZs. However, Lucia Crimin, deputy director of the RTB, said the board has recently commenced analysis in this regard.
“We expect that, by the end of this year, through this process, we will enhance our ability to identify potential noncompliance with rental law – in particular the requirements to register tenancies and to set rent in compliance with RPZ rules.”
Eoin Ó Broin, Sinn Féin’s housing spokesman, raised concerns about the “significant drop-off” in new tenancy registrations, with a 31 per cent decrease when compared to the same period in the previous year.
“For renters, this means rents continue to spiral out of control while supply continues to contract. How are regular working people expected to afford these rents? How are they to save for a deposit to buy a home? Month on month, year on year, rents continue to rise for new and existing tenants, inside and outside rent pressure zones,” he said.
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