Respite for renters as rate rise eases

Renters are finally getting some respite from rising rents, with the rate of increases demanded by landlords easing for the first time in five and a half years. However, that still leaves the average national rent at just under €950.

Meanwhile, an old trend is re-emerging with a fresh race to the commuter counties as city centre rents squeeze out more and more tenants.

According to property website Daft.ie, a slowdown in Dublin is the main factor moderating average rents nationally. Rental inflation there was running at 16.5% last spring but had calmed to below 10% last month.

Similarly in the other city centres, while rents are still rising, they are doing so at a slower pace. In Cork City, rents are 7.3% higher than last year. In Galway they are 7% higher, Limerick 6.2%, and Waterford 5.1%.

In money terms, that puts average rents at €1,350 in Dublin, €891 in Cork, €871 in Galway, €702 in Limerick, and €624 in Waterford.

Outside the main cities, however, rental inflation remains strong, particular in the four commuter counties serving Dublin, where rents are 14.1% higher than they were a year ago.

Ronan Lyons, economist at Trinity College Dublin and author of the Daft report, said the trend that saw rental inflation higher in the commuter belt than in Dublin showed Dublin prices were out of reach for many.

“The slowdown in rental inflation in Dublin at a time when new listings are sluggish suggests that a limit to affordability has been reached there,” he said.

“The underlying lack of construction in a city growing by roughly 10,000 new families every year has created a new generation of commuter, one driven not by preference for green space but by the hard maths of affordability.”

The affordability issue is illustrated by a comparison between the adjoining areas of West Dublin and Co Meath. In the former, a three-bedroom semi-detached house commands an annual rent of nearly €15,000, more than 50% higher than neighbouring Meath.

“With a gross household income of, say, €50,000, it is clear that, even in Dublin’s most affordable locations, those on average incomes are simply not able to afford rents,” said Mr Lyons. “Unfortunately, redistributing renters from the city to its commuter towns does not solve the problem, it merely postpones it.”

Countrywide, there were just over 5,200 properties available to rent on February 1, down more than a quarter on the same figure a year previously. This is the lowest level of availability nationwide since May 2007.

Average monthly rents across the country range from a high of €1,521 in South County Dublin to a low of €418 in Co Leitrim. Kildare has the fastest rising rents —up 15.5% between 2013 and 2014 — while Monaghan has the slowest increases — up just 0.4% in the same period.