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Rent fall biggest in 11 years 'and is set to plunge further'

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Report author Ronan Lyons

Report author Ronan Lyons

Report author Ronan Lyons

The cost of renting fell last month due to the economic impact of the pandemic.

Rental costs were down by 2.1pc on average in April, compared to March, according to the latest Rental Report by Daft.ie.

There has also been a 40pc rise in the number of homes available to rent.

It is now expected that rental costs will keep falling this year due to the sharp rise in unemployment.

Rental costs also decreased in the last three months of last year, which was the first time in more than seven years they have fallen quarter on quarter.

However, the fall in April is the largest one-month decrease in rents since March 2009.

This means it is the biggest drop in rental costs in more than 11 years.

The cost of renting is still higher than a year ago because of rises in the months before April. The average monthly rent stood at €1,418 in the first three months of this year. This is €676-a-month higher than the low seen in late 2011.

Over the first three months of this year, rents rose by 3.8pc, largely because of sharp rises in January and February.

However, the percentage rise for the first quarter marks the lowest rate of inflation since the end of 2012.

Rental costs could keep falling, according to author of the report, Professor Ronan Lyons.

"The prospects for the rest of the year must surely be for rents to fall as unemployment rises," he said.

The number of homes available to rent on May 1 nationwide was almost 40pc higher than on the same date a year earlier.

There were almost 3,800 homes on the market, compared to 2,700 in May last year.

This is despite fewer rental ads being posted.

Crash

Prof Lyons said this was down to the fact that a number of landlords have withdrawn their rentals from short-term listing sites like Airbnb and are putting them on the market.

However, that was mostly down to a crash in demand, with students returning home and few people moving to the cities to take up new jobs, he said.

The rental market could be more affected than the house sales market in this downturn, said Prof Lyons.