Irish Rental Prices Soar, Now Double Celtic Tiger Peak

The average open-market rent in Ireland has surged to €2,055 per month, which is now more than double the rental prices seen at the peak of the Celtic Tiger era. This increase reflects a 1.6% rise in rents during the second quarter of 2023, marking the eighteenth consecutive quarterly increase, according to the latest report from Daft.

The report highlights that the average rent is significantly higher than levels just before the Covid-19 pandemic, which further underscores the ongoing crisis in the rental market. While Dublin has seen a slower pace of rent increases in recent years due to new purpose-built housing, the overall supply has dwindled, exacerbating the affordability crisis.

Declining Availability and Rising Inflation

As of August 1, 2023, there were approximately 2,300 homes available for rent across Ireland. This figure represents a 14% decrease compared to the same time last year and is nearly half the average availability from 2015 to 2019. The inflation rate in Dublin currently stands at 6.5%, closely aligning with the national average of 7.3%.

In cities outside the capital, rental prices have also seen significant increases. For instance, rents in Galway city have risen by 8.5%, driven by a persistent lack of housing supply. This shortage is particularly challenging for students attending the city’s two universities. Similarly, Limerick city has experienced a dramatic rise in rental costs, with inflation rates nearing 15%.

Long-Term Solutions Needed

Ronan Lyons, an Associate Professor of Economics at Trinity College Dublin and the author of the Daft report, emphasized that the upward trend in rents is likely to continue due to limited availability. He stated, “As has been the case for almost fifteen years, the solution to a deficit of rental housing is ensuring more rental housing gets built.”

Lyons pointed out that the substantial rise in rents is a direct result of the extreme scarcity of rental properties in relation to demand. “The average open-market rent nationwide – at a little over €2,000 a month – is twice the rent seen at the Celtic Tiger peak and 50% higher than the level of rents that prevailed just before the Covid-19 pandemic hit,” he stated.

While recent government actions have aimed to relax certain aspects of Ireland’s rental control measures, these changes are not expected to take effect until next year. The lengthy planning process in the country means that it will take several years before any increase in housing supply can effectively address the existing rental housing deficit.

The ongoing rise in rental prices, alongside the marked decrease in available properties, paints a concerning picture for many Irish citizens struggling with housing affordability. As the situation evolves, the focus remains on finding sustainable solutions to meet the growing demand for rental housing across the country.