Lowest rate of rental inflation in nine years as Dublin prices fall in the year – daft.ie
It was a tale of two rental markets in 2020 with monthly rents in the capital down 3%, but outside of Dublin, rents were up 5%, the latest rental report from property website daft.ie shows.
The average rent per month nationally stood at €1,414 in the final quarter of the year, up 0.9% on the same time in 2019.
It was the lowest rate of annual inflation since 2012, but the average national rent now stands at almost double the low point in late 2011 when the average rent was €742 nationally.
In Dublin, rents fell 3.3% during the year to reach an average of €1,984 per month with rent declines concentrated in the second and fourth quarters of the year.
In the rest of the country, however, rents rose by 5.4% on average during 2020 to an average of €1,048.
Daft.ie said it saw only a modest fall in the second quarter – when the first set of restrictions were introduced – and an increase during the final three months of the year.
The national picture largely reflects the changes in the availability of rental homes in the year.
In Dublin, there were 2,600 homes available to rent on February 1 this year, an increase of almost two thirds on the fewer than 1,600 available on the same date in 2020.
In the rest of the country, however, the number of homes available to rent fell sharply from almost 2,000 on February 1 2020 to just 1,139 a year later.
“These latest figures should remove any lingering doubts about the importance of supply in lower rents,” Ronan Lyons, Associate Professor of Economics at Trinity College and author of the daft.ie report, said.
“Outside Dublin, Covid-19 has led to a further worsening of supply conditions in the rental market, with the number of homes coming on each month down 17% on already low levels.
In Dublin, Covid-19 has had the opposite effect, with the number of homes being advertised to rent up 64% on February 1, compared to a year previously.”
He pointed out, however, that rents in the capital, as well as in Ireland’s other main cities, remain at twice the levels they were at a decade ago.
“This underscores the importance of ensuring the construction of tens of thousands of new rental homes over coming years, to help bring rents back down to affordable levels,” Mr Lyons concluded.