Irish open-market rent inflation slowed to 1.4 per cent between March and June according to a new report from Daft, following a record 4.4 per cent surge in the first quarter driven by new government controls. Trinity College Dublin economist Ronan Lyons stated that the initial spike represented a one-off market correction rather than the start of a sustained upward trend as landlords reset rents between tenancies.
Rent Inflation Slows After Regulatory Shift
Under the Government’s updated framework, landlords are permitted to adjust rents to market rates between tenancies while facing limits on no-fault evictions. Critics previously warned that this mechanism would trigger widespread evictions and severe price hikes across the housing sector. However, second-quarter data shows national rent inflation cooling significantly after the initial legislative transition.
According to Ronan Lyons, the author of the Daft report, the first-quarter surge was a one-time adjustment rather than a recurring increase. “Once those tenancies have turned over, the effect fades,” Lyons said. He noted that the adjustment appears largely complete in Dublin, where rents rose by 0.8 per cent, and in other cities at 1.1 per cent. Price increases continue working through regional markets, recording 2.9 per cent in Leinster and 2.8 per cent in Munster over the same period.
Did you know?
Average open-market rent for a two-bedroom apartment reached €2,204 per month between March and June, according to the Daft report. This figure sits 42 per cent above pre-Covid levels and 78 per cent higher than a decade ago.
Regional Disparities in Market Rents and Availability
While Dublin experienced modest quarterly growth, inflation remained pronounced in cities outside the capital. Market rents in the second quarter rose 13 per cent year-on-year in Galway city, 12 per cent in Cork, and 11 per cent in Limerick. Waterford city recorded an annual inflation rate of 5.5 per cent, aligning closely with Dublin’s 6.5 per cent year-on-year increase.
Rental stock figures demonstrate a sharp geographic divide nationwide. Daft reported just under 2,400 homes available to rent across the country at the start of the month, representing a 5 per cent increase compared to the previous year. Yet availability in Dublin fell by 18 per cent to fewer than 1,150 homes, while availability across the rest of the country rose by 40 per cent. Total national availability remains well below pre-pandemic norms, which typically featured more than 4,300 homes to rent at any one time.
Pro Tip for Renters:
Regional rental markets outside Dublin are experiencing faster percentage growth, with Connacht-Ulster rents climbing 90 per cent and Munster rents rising 75 per cent over a six-year period, according to the report’s findings on national rental scarcity.
Shifting Cost Dynamics Across Irish Regions
The latest market data highlights a broader shift in regional cost disparities. Lyons observed that the premium attached to renting in Dublin compared with the remainder of the country has dropped to an all-time low. This contraction occurred even as Dublin rents climbed to a point one-quarter above pre-Covid benchmarks.
Rental scarcity remains a persistent national challenge requiring targeted policy responses. Lyons emphasized that measures to bring forward new market rental supply need to be capable of working outside Dublin to address the rapid price acceleration observed across Connacht-Ulster and Munster over the past six years.
Frequently Asked Questions
What caused the spike in rents earlier in the year?
The initial 4.4 per cent surge in the first quarter coincided with the introduction of new government regulations allowing landlords to reset rents to market rates between tenancies.
Is the recent rent inflation expected to continue?
No. According to report author Ronan Lyons, the first-quarter surge was a one-off market correction rather than the start of a recurring trend, with adjustment effects fading as tenancies turn over.
How many homes are currently available to rent nationwide?
Daft reported just under 2,400 homes available to rent across the country at the start of the month, which remains significantly below pre-pandemic norms of over 4,300 homes.
How do Dublin rental trends compare to the rest of the country?
Dublin rents rose by 0.8 per cent between March and June, and the relative cost premium of renting in the capital has fallen to its lowest level on record as regional markets experience faster growth.
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