Rents continue to rise despite Covid-19 impact

ireland
Rents Continue To Rise Despite Covid-19 Impact Rents Continue To Rise Despite Covid-19 Impact
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James Cox
Rent prices in Ireland are still on the rise despite the impact of the Covid-19 pandemic, according to the latest Daft.ie Housing Market Report.

Average national renting prices rose by 0.5 per cent in June, the rise was present across the country but biggest in the Leinster area (+1.5 per cent).

The average national monthly rent was €1,412 while the average for Dublin was €2,030. Rents in Leinster were also an average of 2.5 per cent higher than they were in March.

Rent on the rise

Rents in Dublin fell by 2.5 per cent in April from their March level but rather than falling further in the months since, they have bounced back. Rents in Dublin are now 2.1 per cent below what they were in March.

This is a bit of a surprise as there were almost 50 per cent more available rentals in Dublin between the start of May and the end of July compared to the same time in the capital last year.

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In the rest of the country there were 1.5 per cent fewer rentals available compared to the same period in 2019.

Ronan Lyons, Assistant Professor in economics at Trinity College Dublin, offered two explanations as to why the rent in Dublin did not continue to fall.

"The first is economic: as I have argued in previous reports, the underlying shortage of rental accommodation in Dublin is very acute – perhaps as high as 70,000 based on the complete lack of construction of rental homes in the 2010s. The lack of rent falls may simply be due to some of that long-run pent-up demand coming on stream, despite the pandemic."

Prof Lyons added: "A second explanation is regulatory: the nature of Rent Pressure Zones punishes landlords who cut their rents. If you lower your rent now, the rent you set in 1, 3 and 10 years will reflect the cut you make today. So, however open landlords might be to haggling ‘at the door’ and offering a month or two free rent at the start to sweeten the deal, they may be very reluctant to flag in an ad that they are indeed cutting their rent."

The average national sale price stood at €260,000 according to the report, a 2.3 per cent increase.

Analysing the latest data, Prof Lyons said that the housing market in Ireland has 'brushed off' the first wave of the Covid-19 pandemic.

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