Rent inflation in Ireland decreased to 1.4% between March and June 2023, following a record surge of 4.4% in the first quarter, according to a report by Daft.ie. Economist Ronan Lyons, who authored the report, described the earlier spike as a "one-off jump" related to new rental controls that allowed landlords to reset rents to market rates between tenancies.
Key Details
The report indicates that the average open-market rent for a two-bedroom apartment rose to €2,204 per month, which is 42% higher than pre-COVID levels and 78% higher than a decade ago. The annual rate of rent inflation was recorded at 7.7%, an increase from 4.4% a year earlier. In cities outside Dublin, rent prices also saw significant increases, with Galway city rents up 13% year-on-year, Cork up 12%, and Limerick up 11%.
Lyons noted that the initial surge in rents was largely a one-time adjustment. He stated, "Once those tenancies have turned over, the effect fades," suggesting that the adjustment is nearly complete in Dublin, where rents rose by 0.8%. In other regions, rent increases were reported at 2.9% in Leinster and 2.8% in Munster.
Background
The new rental system has faced criticism, with concerns about potential evictions and further price hikes. However, the report suggests that the immediate impact of the new rules has subsided.
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The slowing rent inflation could ease pressure on consumer spending and housing affordability, impacting sectors related to real estate and consumer goods. Investors will watch for the upcoming quarterly rental reports to assess ongoing trends in the housing market.
Based on reporting by: irishtimes.com