The escalation in rents for newly-established tenancies beyond the Greater Dublin Area (GDA) was nearly double that within Dublin itself by the close of the previous year. This is largely due to the surge in remote working and relocations from the capital in the wake of the Covid-19 pandemic.
On Thursday, the Residential Tenancies Board (RTB) released its residential rent index for the final trimester of 2023. This report revealed a record-breaking annual rise in home rents outside the GDA during this period.
The study indicated that the countrywide standard average monthly rent for new tenancies reached €1,595 in the last three months of the previous year, which was a marginal reduction of €1 from the preceding quarter. This equates to a yearly surge of 9.1 per cent.
Meanwhile, for existing tenancies, the national standardised monthly average rent stood at €1,374 at the end of year, indicating a 5.9 per cent yearly growth.
There was a noticeable disparity in the rent increases for new tenancies, contingent upon location. Rental costs in counties not typically associated with major rental markets (those outside the GDA), have seen new tenancy rents continually ascend in recent times.
Within Dublin, the standard average rent for new tenancies was €2,098 per month during the final quarter. In contrast, rents stood at €1,569 in the GDA excluding Dublin, and decreased further to €1,225 in areas outside the GDA.
Year over year, the growth rate of rents for new tenancies in Dublin was 6.5 per cent. This figure was eclipsed by the annual increase for new tenancies in areas beyond the GDA, which stood at an impressive 12.6 per cent.
The rate of rent increases also differed based on the type of property. For houses, new tenancy rents within the capital noted a growth of 7.3 per cent, whereas those beyond the GDA recorded a record-breaking rise of 13.8 per cent. Similarly, in terms of apartments, rents for new tenancies in Dublin grew by 5.9 per cent annually, against an annual increase of 10.6 per cent in areas outside the GDA.
Experts in the sector have attributed the escalating rent prices for new tenancies outside of Dublin to the rise in remote work arrangements. These new working models have led to an exodus of many individuals who were originally based in Dublin, in turn triggering increased demand for rentals across the country.
Limerick emerged as the county where the average rent for new tenancies witnessed the largest growth, recording a 25% spike, year-on-year. Cavan followed closely with a 20.9% increase in new tenancy rents on a year-on-year basis.
The price gap between rents for new and old tenancies continued to persist, with the former registering 16.1% higher than the latter in the fourth quarter. Sligo highlighted the highest disparity in rent prices between old and new tenancies at 36% (€300 per month), whereas Louth noted the smallest difference at 11% (€126 per month).
The RTB noted the existing tenancy rent index is unsuitable for measuring landlords’ compliance with rent-pressure zone (RPZ) price hike limits as it also factors in properties beyond RPZs. Nonetheless, Lucia Crimin, the RTB’s Deputy Director, mentioned that the board initiated an examination in this respect.
She added, “Anticipating that by the close of this year, the process will bolster our capability to detect potential violations of rental laws. Particularly, the obligation to register tenancies and adjust rent in accordance with RPZ regulations.”
Moreover, Sinn Féin’s housing spokesperson, Eoin Ó Broin, expressed apprehension about the considerable decline in new tenancy registrations – a slump of 31% compared to the equivalent period the previous year.
He commented, “The continuous increase in rents coupled with shrinking supply signifies that rents are spiralling beyond control. It questions how ordinary working individuals can afford these soaring rents or save for a house deposit. The trend of rent hikes persists month after month, year after year, for both new and ongoing tenants, in and out of the rent pressure zones.”