Pace of rent increase slows to 7% after caps introduced

Rents rose by over 7% in the first quarter of the year, but the rate of increase has slowed.

But the Residential Tenancy Board (RTB) said it’s still too early to say if the slowdown is linked to the introduction by the Government last year of rent pressure zones (RPZs) — a move which capped hikes in high-rent areas.

The first figures since the introduction of RPZs, show while rent rates in Dublin dropped slightly in the first quarter of the year compared to the same period last year, the capital’s rental rates are still running at 8% above their late 2007 peak.

Private renters in other major cities, including parts of Cork and Galway, are also paying up to 8% above the average national rent which now stands at €987 a month — up €1 on the previous quarter.

Other key findings show:

• Overall rents in the capital fell 1.5%, mainly due to a fall in apartment rents;
• House rents in the capital rose quarter-on-quarter by 0.1%;
• There is evidence that year-on-year growth in apartment rent increases in Dublin has slowed — the rate of increase is down from double-digits to just under 8%;
• Outside Dublin, rents are up an average of 1.3% quarter-on-quarter, with an annual rise of 7.6%;
• Rents outside the capital are still 8% below their 2007 peak but the margin between the two is closing.

However, while rents nationally continue to trend upwards, the data shows that quarterly growth was relatively flat, increasing by just 0.1%, down from 2.8% the previous quarter.

RTB director, Rosalind Carroll, said the findings for the first quarter of 2017 suggest the rate of increase in private rents is moderating.

The new figures show no additional parts of the country meet the criteria to be designated RPZs.

Former housing minister (now foreign affairs) Simon Coveney will today launch a public consultation on the review of the rent predictability measure and the RPZs system.

Meanwhile, a report by the Central Bank says house prices — which are expected to rise by a further 10% this year — are “not currently overvalued”.