Rental market faces supply warning as average monthly costs hover close to €2,000

The daft.ie report also shows that availability had almost doubled between late 2022 and late 2023, but it has fallen considerably since the start of the year. Picture: Leah Farrell / RollingNews.ie

The average monthly rent is hovering close to €2,000, with fresh warnings about a lack of supply in the likes of Limerick, Cork, and Waterford where they have surged.

New figures show that despite an easing of rental inflation, especially in Dublin, market rents rose by an average of 0.6% in the first quarter of 2024 — the 13th consecutive quarter in which rents nationwide have increased.

The increase between last December and this March is the smallest in that run, and shows that — after a decade — the rate of increase has slowed.

The latest report by property website daft.ie shows the average open-market rent nationwide in the first quarter of the year was €1,836 per month, up 4.9% year-on-year.

The decline in rental inflation, from a peak of 14% in mid 2022, is driven by a significant increase in rental supply in Dublin — over 125 purpose-built rental developments opened since 2016, adding over 10,000 new rental homes — where market rents in the first quarter were 2.5% higher than a year previously.

Rental inflation has cooled in other markets as well, with the average increase outside Dublin at 7.2% year-on-year.

However, in Cork, rents were up 8%. In Galway and Waterford, the year-on-year increases were 5% and 6.9% respectively. In Limerick city, market rents were up a massive 17.5% year-on-year — one of the largest increases in the country.

A city-by-city breakdown for the first quarter of the year shows that the average market rent rate was:

• €2,395 in Dublin, up 2.5% year-on-year; 
• €1,870 in Cork city, up 8%; 
• €1,933 in Limerick city, up 17.5%; 
• €1,861 in Galway city, up 5.0%; 
• €1,495 in Waterford city, up 6.9%; 
• And €1,467 in the rest of the country, up 6.8%. 

The number of homes available to rent on the open market remains low, the report found, with just 2,000 homes available on May 1 — effectively unchanged on the same date last year, and well below half the 2015-2019 average of almost 4,400.

The report also shows that availability had almost doubled between late 2022 and late 2023, but it has fallen considerably since the start of the year, prompting fresh warnings about housing supply, and of further upward pressure on open-market rents likely this year.

The report's author and associate professor in economics at Trinity College Dublin, Ronan Lyons,
said the construction of significant numbers of new rental homes in the Dublin area has led to the considerable slowing of rental inflation over the last 18 months.

"Improvements in the availability of homes to rent look to have stalled. 

Without additional increases in rental supply, any pressure on rents is likely to be upward in nature, further straining affordability for those on regular incomes

“For that reason, policymakers must develop a thorough understanding of rental supply dynamics ahead of a detailed plan on dramatically increasing rental supply over the rest of the decade.”