Inflation in rents spreading outside Dublin

The year-on-year increase in the average rent nationwide accelerated to 4.8% in the third quarter of 2013, up from 4.2% in Q2, according to the quarterly Daft.ie Rental Report released today. The acceleration is due mainly to trends outside Dublin, with rental inflation outside Dublin rising from 0.9% to 1.8% in recent months. The average rent nationwide is now €824.

In Dublin, rents were 7.6% higher than a year previously. This is related to very tight supply, with fewer than 1,500 properties available to rent on November 1, compared to over 6,700 on the same date four years previously.

Outside Dublin, rents in the other cities are rising but less rapidly, with the exception of Waterford city, where rents continue to fall, at a rate of 1.6% year-on-year. In Cork and Galway cities, rental inflation is between 3% and 4%, while in Limerick, rents are 1.8% higher, the first annual increase in rents since late 2007. Outside the cities, rents rose by 2.7% in Leinster and 0.9% in Connacht-Ulster but were static in Munster.

Tipperary & Munster
In Munster, rents were static on average in the year to September 2013, compared to a fall of 1.5% a year previously. In Tipperary, rents are largely stable, rising 0.2% in the 12 months to September 2013. The average advertised rent is now €576, a fall of 26% from the 2007 peak.

Commenting on the report, Ronan Lyons, economist at TCD and author of the Daft Report, said: “An acute shortage of rental accommodation has now emerged in Dublin, with fewer properties on the market now that at any point since records start in January 2006. Clearly, any NAMA supply in the capital would be a welcome addition in easing tenant concerns. Elsewhere, markets look relatively balanced with oversupply from 2009 having corrected itself in many counties.”
Year-on-year change in rents – major cities, Q3 2013

Dublin: €1,152, up 7.6%
Cork: €831, up 3.1%
Galway: €816, up 3.6%
Limerick: €662, up 1.8%
Waterford: €601, down 1.6%

The full report is available from www.daft.ie/report and includes a commentary by Ronan Lyons, Assistant Professor of Economics at Trinity College, Dublin, and author of the Daft Report, as well as an analysis of affordability and statistics on residential yields around the country.