Rental premiums remain high despite COVID-19 presence

Despite a national decrease in residential property premiums due to the impact of COVID-19, prices within Westmeath escalated by 6.3 percent in the first three months of this calendar year.

Property rental premium figures are now 36 percent above their previous peak in early 2008, with the average listed rent priced at €1016, up 93% from its lowest point.

Nationally rents fell by 2.1 percent on average in April, compared to March, according to the latest Rental Report by Daft.ie, reflecting the economic fallout from the COVID-19 pandemic. This is the largest monthly decrease in over eleven years.

With increases throughout much of the last 12 months, rents in the first quarter of 2020 were 3.8 percent higher than a year previously, although this does mark the lowest rate of inflation since late 2012. The average monthly rent nationwide stood at €1,418 in the first quarter of 2020, €676 per month higher than the low seen in late 2011.

The early 2020 trends have been broadly similar across the country, with rents rising by close to four percent in many parts of the country in the year to March before falling up to two percent in April.

In Dublin, rents fell by 2.5 percent in April, compared to March, while in the four other major cities, they fell by an average of two percent. In Leinster, outside Dublin, rents fell by 1.5 percent between March and April, while in Munster and Connacht-Ulster, they fell by 1.8 percent and 1.4 percent respectively.

The number of homes available to rent nationwide on May 1 was almost 40 percent higher than on the same date a year earlier, with almost 3,800 homes on the market, compared to 2,700 in May 2019. This increase in availability comes even as the number of rental ads being posted dropped sharply.

Over the course of April 2020, there were almost 15 percent fewer homes advertised than during April 2019.

“Before Covid-19 stopped the economy in its tracks, it seemed as though things were finally beginning to improve for Ireland’s rental sector. After a decade where effectively no new rental homes were built, the situation had improved in recent quarters. Figures in this report show that over 35,000 new rental homes were in the pipeline, when Covid-19 shut down the construction sector. Given that the pandemic is unlikely to change any of the long-term fundamentals driving underlying housing need, there is a danger that while its immediate impact might be to lower rents, its longer term effect could be to worsen the shortage," Ronan Lyons, economist at Trinity College Dublin and author of the Daft Report, remarked.

 

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