The Residential Tenancies Board (RTB ) has published the quarterly Rent Index for the July to September period (Q3 ) of 2021.
Compiled in conjunction with the Economic and Social Research Institute (ESRI ), the RTB Rent Index is the most accurate and authoritative report on the Irish rental market.
This Index shows that nationally, rents grew by 8.3% year-on-year in this period. This is the highest national growth rate seen since Q4 2017, when growth reached 8.4 percent. The national standardised average rent stood at €1,397 during Q3 2021, an increase of €44 on the previous quarter.
Considering the longer-term trend in prices, Dublin has seen a greater initial drop and slower rebound in rental price growth since the onset of the Covid-19 pandemic than elsewhere.
This likely reflects the differing impact of the Covid-19 economic shock on both the demand and supply sides of the market in the short run. While rental price growth remained lower in Dublin than elsewhere in Q3 2021, its quarter-on-quarter growth of 3.6% is the highest since Q2 2019.
This index is based on actual rents paid on 15,042 private tenancies newly registered with the RTB during the quarter. This includes new tenancies in existing rental properties; new rental properties never let before; and new tenancies in properties that have not been let in the immediate two years prior to this tenancy.
The Rent Index does not provide a measure of the rental prices faced by existing tenants. Traditionally, Q3 sees the highest rate of tenancy registration with the RTB, coinciding with the start of the academic year. This usual pattern is not repeated in Q3 2021.
While it does mark a small increase on Q2 2021 (14,361 ), there has been a substantial decline in the number of tenancies registered and included in the sample, with a 31 percent decline in the sample compared to a pre-pandemic Q3 2019.
These figures show the continued challenges posed by the re-opening of the Irish economy. The lower number of registrations has certainly impacted the standardised average rents and could be, among other factors, a result that people are staying in their tenancies longer due to uncertainty in the market.
“Our previous Q2 2021 RTB Rent Index report indicated that Ireland’s rental sector was rebounding from a slowdown in rent growth during the pandemic. This Q3 2021 report continues to show a significant upward trajectory of rent levels in the Irish rental market and reflects a sharp rebound from a reduction and slowdown in rent levels during the pandemic.
"It is clear, the ongoing introduction and easing of Covid-19 related restrictions around rental price growth in line with the public health measures has been affecting trends presented throughout 2020 and 2021 and there continues to be a large degree of uncertainty across the sector.”
“The significant rise in rent prices across Ireland is indicative of the wider growth being experienced in our economy, as a result of lifted public health restrictions. Rates of unemployment have dropped significantly, and Irish retail sales continue to grow. Not only is the growth in the rental sector reflective of that in other aspects of our economy, but it is also in line with what is happening in economies around the world.
“There are other reasons for the increased figure. A lower number of tenancy registrations has impacted average rents, seemingly reflected by a tendency for people to stay in their rental properties longer. Rents too continue to increase more rapidly outside the Greater Dublin Area (GDA ) and other non-urban areas, potentially linked to the continuation of the pandemic-effect around long-term working and lifestyle choices," Padraig McGoldrick, Interim Director of the RTB, commented on the latest Rent Index findings.
“The Residential Tenancies (Amendment ) Act 2021 was signed into law on 11th December 2021. It introduced further protections from rent increases in Rent Pressure Zones, or RPZs, where rents cannot be increased by more than general inflation, as recorded by the Harmonised Index of Consumer Price (HICP ) or 2% per year pro rata, where HICP inflation is higher. These measures have been introduced to curtail rent increases for existing tenancies and new tenancies in existing rental properties. It should be noted that the vast proportion of these existing tenancies are not reflected in the RTB Rent Index as the Index only includes new tenancies in existing rental properties in addition to rental properties new to the market.”
For anyone who has any questions about the new legislation and the application of these measures, visit www.rtb.ie