Rents in Dublin fell by more than 3 per cent last year, while rental prices outside of the capital increased by 5.4 per cent in 2020, according to the latest rental price report from property website Daft.
The report shows that the average rent nationwide in the final three months of 2020 was 0.9 per cent higher than a year previously.
The average monthly rent stood at €1,414 in the final quarter of 2020, up from a low of €742 per month seen in late 2011.
The national average hides significant regional variation, though. In Dublin, rents fell 3.3 per cent during the year 2020, with rent declines concentrated in the second and fourth quarters of the year.
In the rest of the country, however, rents rose by 5.4 per cent on average during 2020, with only a modest fall in the second quarter lockdown and an increase during the final three months of the year.
In Limerick city, rents were almost 4 per cent higher year-on-year, while in Cork and Galway cities the increase was just under 5 per cent. In Waterford city, rents rose by 5.6 per cent – the same rate of increase as in the rest of the country.
The different trends in rents reflect changes in the availability of rental homes. In Dublin, there were 2,600 homes available to rent on February 1st, up from fewer than 1,600 on the same date in 2020.
In the rest of the country, however, the number of homes available to rent has fallen sharply – from almost 2,000 on 1st February 2020 to just 1,139 a year later.
Commenting on the report, Ronan Lyons, economist at Trinity College Dublin, said: “These latest figures should remove any lingering doubts about the importance of supply in lower rents.
“Outside Dublin, Covid-19 has led to a further worsening of supply conditions in the rental market, with the number of homes coming on each month down 17% on already low levels.
“While demand for rental homes outside the capital has fallen – with the rise in unemployment – it has not fallen as much as supply, pushing rents further upwards.”
He added: “Nonetheless, rents in the capital – and in Ireland’s other main cities – remain at twice their level a decade ago. This underscores the importance of ensuring the construction of tens of thousands of new rental homes over coming years, to help bring rents back down to affordable levels.”