The Future of Ireland’s Rental Market: Trends and Predictions

The Current State of Rental Prices

The rental market in Ireland has seen significant changes since the Covid-19 pandemic. According to the latest report by Daft.ie, open-market rents across the country are now 43 per cent higher than before the pandemic. This trend highlights a persistent issue in the housing market, where the availability of rental homes has fallen back after a brief improvement last year.

At the beginning of February, there were fewer than 2,300 homes available to rent nationwide. The average open-market rent in the final quarter of 2024 stood at €1,956 per month. This marks a 5.7 per cent increase in overall market rents during 2024, although this is slightly lower than the 6.8 per cent increase recorded in 2023.

Regional Variations in Rental Increases

The rental market in Ireland shows significant regional variations. In Dublin, rents in the final quarter of last year were 4 per cent higher than a year earlier, reaching €2,481. Outside the capital, rents were 7 per cent higher on average. This is the smallest gap in almost two years, indicating a more balanced increase.

Cork and Galway cities saw rents rise by 10 per cent during 2024, while in Waterford city, the increase was 7.4 per cent. Limerick, however, experienced the highest inflation rate, with market rents increasing by 19 per cent during 2024. Outside the cities, rents increased by 6.2 per cent on average. In Limerick city, the average market rent in the final quarter of last year was €2,271.

The Impact of Rent Controls

The Daft.ie report highlights the impact of rent controls on the market. Ronan Lyons, associate professor in economics at Trinity College Dublin, notes that an acute shortage of rental housing continues to plague the market. Rents for movers have increased by almost half since rent controls were tightened in 2021, while rents for ‘stayers’ have risen by just 7 per cent in the same time.

This disparity creates a wedge between those who benefit from rent controls and those who do not, exacerbating the rental crisis. As the rental crisis enters its second decade, significant reform is needed to rent controls to avoid disproportionate pressure on some renters and to ensure new supply comes on stream over the coming years.

Future Trends and Predictions

Supply and Demand Dynamics

The rental crisis in Ireland is expected to persist due to the shortage of rental housing. Rising rents are a clear signal of this shortage. The ultimate solution to this problem is to ensure new rental housing is built. This must be central to housing policy for the new Government.

Policy Recommendations

Ronan Lyons suggests that significant reform is needed to rent controls. This reform should focus on avoiding a situation where the pressure in the market falls disproportionately on some renters. Additionally, ensuring new supply comes on stream over the coming years is crucial. Rising rents are a signal of a shortage of rental housing, and the ultimate solution to that shortage is to ensure new rental housing is built.

Regional Rental Trends

Dublin

Dublin continues to be one of the most expensive cities for renters. The average rent in the final quarter of last year was €2,481, a 4 per cent increase from the previous year. This trend is expected to continue, with rents likely to rise further due to high demand and limited supply.

Cork and Galway

Cork and Galway cities saw a 10 per cent increase in rents during 2024. This trend is likely to continue, with rents in these cities expected to rise further due to their growing popularity as residential areas.

Limerick

Limerick experienced the highest inflation rate, with market rents increasing by 19 per cent during 2024. This trend is expected to continue, with rents in Limerick likely to rise further due to high demand and limited supply.

Waterford

Waterford city saw a 7.4 per cent increase in rents during 2024. This trend is likely to continue, with rents in Waterford expected to rise further due to high demand and limited supply.

Outside the Cities

Outside the cities, rents increased by 6.2 per cent on average. This trend is expected to continue, with rents in these areas likely to rise further due to high demand and limited supply.

Table: Key Rental Trends in Ireland

Did You Know?

The rental crisis in Ireland has been ongoing for over a decade. The shortage of rental housing has led to a significant increase in rents, making it difficult for many people to find affordable accommodation.

Pro Tip

If you are a renter, consider negotiating with your landlord for a longer lease term. This can help you avoid rent increases and provide more stability in your housing situation.

FAQ Section

What is the current average rent in Ireland?

The average open-market rent nationwide in the final quarter of 2024 was €1,956 per month.

How have rent controls affected the market?

Rent controls have created a wedge between those who benefit from them and those who do not. Rents for movers have increased by almost half since rent controls were tightened in 2021, while rents for ‘stayers’ have risen by just 7 per cent in the same time.

What is the ultimate solution to the rental crisis?

The ultimate solution to the rental crisis is to ensure new rental housing is built. This must be central to housing policy for the new Government.

How have rents changed in Dublin?

In Dublin, rents in the final quarter of last year were 4 per cent higher than a year earlier, reaching €2,481.

What is the impact of rent controls on the market?

Rent controls have created a disparity between those who benefit from them and those who do not. This has exacerbated the rental crisis, with rents for movers increasing significantly while rents for ‘stayers’ have risen by just 7 per cent.

What is the future trend for rents in Ireland?

The rental crisis in Ireland is expected to persist due to the shortage of rental housing. Rising rents are a clear signal of this shortage, and significant reform is needed to rent controls to ensure new supply comes on stream over the coming years.

Call to Action

The rental market in Ireland is facing significant challenges, but with the right policies and reforms, it is possible to address these issues. Share your thoughts and experiences in the comments below, and stay tuned for more updates on the rental market. If you found this article helpful, consider subscribing to our newsletter for more insights and analysis.