Residential Rents Continue to Rise Throughout the Pandemic

The latest Residential Tenancies Board, or RTB, rent index was published this week and the figures confirm that the average cost of renting a home in Ireland grew by 2.7 per cent last year, despite the ongoing pandemic and resulting restrictions. This was a significantly slower rate of growth than the 6.4 per cent recorded in 2019. The monthly average rent nationwide now stands at €1,256. In the final quarter of 2020, Dublin was – perhaps unsurprisingly – the county with the highest average rent at €1,745 per month. While this represents a 2.1 per cent increase year-on-year, viewed quarterly, rent is down 0.8 per cent when compared with Q3 2020. Within the capital, the area around Stillorgan in south County Dublin  was the single most expensive part of the country, with average monthly rental levels coming in at €2,385. Similar to recent past reports, Leitrim and Donegal continue to have the lowest average rental values, currently from €521 per month. It is worth noting that new tenancies continued to account for approximately four-fifths of all registrations,  at 82.8 per cent. Only 17.2 per cent of RTB registrations represent tenancy renewals.

According to the RTB’s interim director, Padraig McGoldrick, “The impact of Covid-19 on the rental sector continued into the fourth quarter of 2020. The national standardised average rent remained static in the quarter and, overall, in the year there had been a significant trend of moderation in rental inflation relative to previous years”. He further cautioned that “It is clear affordability issues and related risks remain”.

The Residential Tenancies and Valuation Act 2020 was introduced in August of 2020, with the aim of protecting tenants who have been impacted financially by the pandemic. These laws essentially restrict the serving of eviction notices and application of rent increases for the duration of the pandemic. The current eviction ban is in place until April 12th 2021, however, this is subject to change, based on public health advice at that time.

Putting these rental figures into context, the average rent in Ireland is now more than €100 more expensive than the average mortgage payment, based on the average sale price available through the CSO during the same period i.e. €297,043 with a monthly mortgage payment of €1,138 per month (30-year loan with an interest rate of 3%).

Speaking on Newstalk radio earlier this week, Trinity College economist Ronan Lyons confirmed “We’re in a uniquely bad position in terms of housing supply for the rental sector”. He went further to say that “I can’t find a similar period where rents increased as much, in real terms, as fast as they have over the last 10 years”.