Dublin properties for rent plunge to low of 1,400 in 2016

Irish house rents rose nationwide by an average of 9.0% during 2015, according to the latest quarterly Rental Report by Daft.ie. This compares to an increase of 10.7% in 2014 and 6.7% in 2013. The national average rent between October and December was €979, compared to €898 a year previously. Supply of properties for rent remains very low with just 1,400 rental homes on the market this month.

For the third quarter in a row, annual inflation in rents outside Dublin – at 9.8% - was greater than in the capital (8.2%). The highest rates of inflation are in the cities outside Dublin, with rents 15.4% higher than a year ago in Cork city and 13.3% higher in Galway city. In Limerick and Waterford cities, annual rental inflation stands at 12.4% and 10.3% respectively.

Supply on the market on February 1st 2016 was at its lowest point on record, with just 3,600 properties available to rent nationwide, that’s compared to over 5,200 a year ago and almost 16,000 five years ago.

The capital remains effectively starved of rental properties, with fewer than 1,400 rental homes on the market at the start of February, less than two weeks supply.

Commenting on the report, Ronan Lyons, economist at TCD and author of the Daft Report, said:

Ahead of the election, there is no sign of any improvement in the extreme lack of rental accommodation throughout the country, particularly in Dublin. The shortage of accommodation was first identified in the Daft.ie Report in late 2010, ahead of the last election. Unfortunately, at the time, the political focus was on legacy issues related to ghost estates and negative equity. Hopefully, the new Government will focus on taking the necessary steps to increase availability of homes to rent early in its term of office.

Year-on-year change in rents – major cities, Q4 2015

Dublin: €1,435, up 8.2%
Cork: €978, up 15.4%
Galway: €887, up 13.3%
Limerick: €778, up 12.4%
Waterford: €673, up 10.3%

Ronan Lyons added:

In Dublin, between 2008 and 2012, there were an average of almost 5,200 properties available to rent at any one time. Since 2012, this has fallen again and again. As of February 1st, there were fewer than 1,400 properties available to rent – in a city of over half a million households, more than a third of whom rent.

But the lack of supply has not been limited to Dublin or even to the cities. In the same period, the total number of properties available to rent in the four other cities – Cork, Galway, Limerick and Waterford – has fallen from an average of 2,000 to just over 300. And outside the cities, the number has fallen from 10,600 to just 1,900.

Nationwide, there were just 3,600 homes available to rent on February 1st, by far the lowest total since the series started in 2006. This lack of availability stems from a lack of construction activity at a time when Ireland's population has grown year-on-year throughout the last decade.

Some of the reasons given for this lack of construction sound plausible at first glance but don't stack up. For example, it is often said that banks won't lend like they used to, or that Irish developers are either too bust or too greedy to build. But none of that explains why Dublin in particular is witnessing such a boom in commercial construction activity, especially new office space. Or why international developers, who work off relatively tight margins in many other countries, can't make the numbers stack up in Ireland.