An analysis of recent trends in the Irish residential rental market 2023 – Year in Review
Across the country, rental inflation halved in 2023 compared to 2022. That is the good news from the latest Daft.ie Rental Report, covering the final quarter of 2023 and reviewing the year as a whole.
Unsurprisingly, that good news is tempered by further context: the overall rate of inflation remains far higher than the levels one would expect to see in a healthy rental market. Open-market rents rose by 6.8% on average across the country in 2023, compared to a near-record 13.7% in 2022. Added to the 10.3% increase seen in 2021, this means that rents in the open market are now, on average, 36% higher than they were at the outbreak of covid19.
But this in turn only tells part of the story. Compared to rents at the outbreak of covid, rents in Dublin at the end of 2023 were up by roughly one quarter – and indeed for much of the worst part of the pandemic (from 2020Q2 to 2021Q2), rents in the capital were static, as demand evaporated.
In the north-west, however, rents in the open market at the end of 2023 were three-quarters higher than at the outbreak of covid19 in early 2020. On average, outside Dublin, rents are about 50% higher than precovid levels.
In the early part of the pandemic, there was what might be termed a reshuffling of rental demand around the country. Many of those previously tied to being in or close to Dublin, because they had to be in an office in the capital on a daily basis, found themselves able to choose their location. And they voted with their feet and moved to cheaper rental markets.
But in effect, this simply took what had been an urban problem over the preceding decade – a worsening shortage of rental accommodation – and made it a national problem. Rents in Dublin in 2019 were about double what they had been almost a decade earlier when they bottomed out. But rents in Donegal were only one third higher than their lower.
Now that comparison to the post-Celtic Tiger low is largely the same in both markets: open-market rents in Dublin are 133% higher, while rents in Donegal are 138% higher.
Indeed, of 29 markets outside Dublin tracked in each Daft.ie Report, only Tipperary has seen a smaller increase compared to the post-Celtic Tiger low. As recently as 2019, only three markets (Meath, Louth and Limerick City) had seen bigger percentage increases.
But while a flight to value may have characterised the first few quarters after the outbreak of covid19, they do not capture what has happened over the last two years. By mid-2022, Dublin was one of the markets seeing the biggest increases, once again. – Ronan Lyons.
Leinster – 14th quarter of rises
2% increase in 3 months. Market rents rose by 2.2% on average in Leinster (outside Dublin) in the final quarter of 2023, the fourteenth consecutive quarterly increase for the region. Compared to a year ago, market rents in Leinster were 8.9% higher – a modest uptick in annual inflation compared to Q3. There were over 425 homes for rent in Leinster (outside Dublin) on February 1st, up 14% on the same date a year ago but still just half the 2015-2019 average of over 850. The cost of renting a room in Leinster, outside Dublin, was roughly 5%
higher on average in the final quarter of 2023 than a year earlier.
The Average rent in the midlands:
Offaly: €1,482, Laois: €1,476, Westmeath: €1,539, Kildare: €1,869.
If your a landlord and looking for some advice, get in touch with Midlands Real Estate.
