Rents fall 2.1% as Covid-19 makes its impact on rental market

Rents in Ireland declined by 2.1% from March to April, the biggest monthly collapse since 2009.

A new report from property website Daft.ie suggests the Covid-19 pandemic is having a significant impact on the rental market and that further rent falls are likely in the coming months.

The report shows rents have actually increased year-on-year to €1,418 per month, but have declined by 2.1% from March to April, the biggest one-month fall in more than a decade.

According to the report, renters in Cork city are now paying an average of €1,396, a 4.8% increase in the last year, while those in Cork county are paying €1,045. In Kerry, rent increased by 4.3% to €884, while renters in Limerick and Waterford cities are both paying more than €1,000 per month, on average.

Overall in Munster, rents fell by 1.8% from March to April as the impact of the pandemic was felt on the market while, nationally, the number of properties listed for rent was 3,800 on May 1, a 40% increase on the same date last year. This is, in part, due to properties which were previously reserved for short-term letting now being advertised in the private rental market due to the collapse of the tourism sector.

Economist Ronan Lyons, author of the report, said the longer term prospect for the market is one of further price falls "as unemployment rises" in the wake of the pandemic.

He said the economic impact will be felt in a number of ways.

He said, "Migrants are overwhelmingly renters and if Covid-19 brings about a downward shift in migration patterns generally, Ireland will notice that more than most countries."

Additionally, Mr Lyons added, those working in hospitality, tourism and retail are likely to be among the worst affected by the economic downturn and many of these sectors "will be the ones where renters are concentrated".

The report also examines the growing build-to-rent sector, referring to the large-scale developments of houses and apartments which are built purely for the purposes of rental accommodation.

Ireland has a pipeline of approximately 50,000 build-to-rent units, some 47,000 of which are in the Dublin area, though there are also 2,600 in Cork.

Approximately 4,000 are under construction and 15,000 more have planning approval.

Mr Lyons raised concerns about the impact of the construction shut-down on these homes given that "Ireland's rental sector saw effectively zero new rental homes added over the past decade".

He said, "The concern therefore is that the 30,000-odd rental homes at various stages of planning and construction – although mostly planning – are affected, thus prolonging Ireland’s rental woes even as rents fall."