Rental Review: First Quarter 2023

Irish Property Market Rent Review

Market rents in the first quarter of 2023 were an average of 1% higher than in the final three months of 2022, the smallest increase since 2020.
 
The average market rent nationwide between January and March was €1,750 per month, compared to €1,387 in the first quarter of 2020 and a low of just €765 per month seen in late 2011.
 
There were significant regional differences in how rents changed in the first quarter.
 
As in recent quarters, the upward trend market rents around the country is driven by extraordinary shortages in the availability of rental accommodation.
 
Nationwide, there were just 959 homes available to rent on May 1st . While this is up 13% on the same date last year, it still represents one of the three lowest totals for availability at the start of the month in a series that extends back to the start of 2006.

 

Over the past two years, the private rental market has faced growing challenges due to various factors. Initially, as society reopened after the COVID-19 pandemic, followed by the war in Ukraine causing a refugee crisis, the rental market experienced increased strain. There are indications that the situation is not improving and may, in fact, be deteriorating. While the availability of rental properties has stopped declining, it remains at exceptionally low levels. Additionally, the rate of rent increase from January to March was significantly smaller compared to the average growth observed in 2021 and 2022.

 

However, addressing the rental housing shortage in Ireland requires significant intervention from policymakers. Although the number of rental homes entering the market from newly built developments has remained steady in recent months, it is anticipated to decrease in the coming quarters unless issues regarding planning certainty and economic viability are addressed. Ultimately, policymakers must establish a clear plan outlining how tens of thousands of new rental homes will be delivered in all major towns and cities throughout this decade.

 

Average market rents, and year-on-year change, 2023 Q1

Dublin: €2,337, up 11.2% year-on-year

Cork city: €1,731, up 7.7%

Galway city: €1,772, up 11.8%

Limerick city: €1,645, up 10.8%

Waterford city: €1,399, up 10.8%

Rest of the country: €1,373, up 12.7%

 

Breaking Down the New Rent Increase Laws

 

There seems to be a lot of confusion since the Government announced they were changing the way which rent increases were going to be set in July 2021 and we are here to break it down for you.

The Residential Tenancies Act 2017 was originally amended to state that in rent pressure zones (RPZs) a Landlord could increase the rent annually by a maximum of 4%., and outside of the pressure zones it could be increased bi-annually.

However, in July it was brought in that the 4% cap is being replaced and from July 9th 2021, rents in RPZs (rent pressure zones) can now only be increased in line with inflation as recorded in the Harmonised Index of Consumer Prices (HICP), with bi-annual reviews outside of RPZ being extended for an additional three years.

Using the HICP value on the date the rent was last set, you can see the difference between this value and the most recent HICP value, if there has been an increase in HICP values the RPZ calculator will produce the rent increase allowed however, if the percentage is a negative or zero value it will show that no increase is allowed. It's really that simple

We highly recommend that you always use the RPZ calculator to ensure that your calculations match up with that of the RTB which we have linked to here

You can also view the full HICP values dating back to January 1996 here:

We hope we made the confusion on the new laws as little easier to understand but if you have any further questions on the new rent increase laws please leave your comments down below!

Regards

The McPeake Team

Daft Rental report from Q1 of 2021

 Daft recently published their Rental Report from the first quarter of 2021on May 12th. 

They've reported that rents have risen an average of 2% in the first quarter of this year. The average national rent is higher than the year previous, making it the largest quarterly gain since mid-2018. Rents in Dublin however have fallen, with the city centre seeing a price drop of 6.5% in just one year, making the average rent in the city now €1,974. Despite this supply in Dublin is up 20%.

The various trends from the past year reflect the availability of homes for rent with supply increasing in Dublin but decreasing everywhere else. Outside of Dublin rents are 7.1% higher than quarter 1 of 2020, with only 1,150 rental units available on May 1st (down one third than what was available the same date in 2020.)  While there were under 2,500 homes available to rent on May 1st 2021.

With vaccinations rolling out and the ease of restrictions, the short term impact of covid-19 is beginning to fade however, the long term undersupply of new rental homes to the market which has been an issue now for some time still needs to be addressed 

If you want to read the detailed report in full, click here

Let us know your opinions on the report, 

Regards

The McPeake Team

Myhome.ie recent survey figures

According to a new survey from property website MyHome.ie 47% of prospective homebuyers think prices will rise by up to 10% in the coming year, while just 26% of respondents said the same last November and only 15% agreed with that sentiment last August.

The most recent survey of 2,521 people shows that housing stock is the most important issue facing prospective buyers, with 50% saying more stock on the market would encourage them to buy now.

Meanwhile, the findings show that prospective homebuyers have largely not been impacted by Covid-related job losses and income drops. 59% of respondents have been able to save more money for a deposit since the onset of Covid-19 last year.

According to the survey, half of respondents agree that the home-buying market is more competitive now than it was before Covid-19 emerged - just 16% disagree with this statement.

Looking ahead, 40% of respondents believe the next year will represent a good time to buy property, that figure is down from 49% last November.

Angela Keegan, Managing Director of MyHome.ie, said that the findings reflect the reality in the market. "We have seen commencements fall by 30% in 2020 compared to the year before, while second-hand stock coming to the market has fallen by 50% in the first two months of 2021 compared to the same time period in 2020.”

Ms Keegan said that the earlier a Covid-19 vaccine could be approved and distributed, the better for the market. "Above all else, we need to deal with the pandemic in order to get the construction sector back working, improve vendor confidence, and redress the imbalance between supply and demand," she said.

Regards,
The McPeake Team...
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A Historic Low Level of properties for sale in Ireland!