Rent rates rise 6.7pc in a year, but market is starting to cool off
Rent hikes are slowing down, with the rise in the past year 6.7pc, a report has shown.
According to the latest quarterly rental report by Daft.ie, this marks the lowest rate of rental inflation across the country since the end of 2013.
Nationwide, the average monthly rate of €1,391 marks the 13th consecutive quarter of record rents.
The average listed rent is now €361-a-month higher than the previous peak in 2008 and almost €650 higher than the low seen in late 2011.
The slowdown in rental inflation is driven by Dublin, where annual inflation has fallen from a high of 13.4pc in mid-2018 to 4.5pc today.
There has been a cooling off in inflation in the other major cities although it is still higher than in Dublin.
In Cork, rents are 7.9pc higher than a year ago, while in Galway city rents are 9.1pc higher.
In Limerick, rents have increased by 10.5pc in a year, similar to the increase seen in Waterford city (10pc).
Outside the major cities, rental inflation varies from 6.2pc in Leinster to close to 12pc in both Munster and Connacht-Ulster.
"The slowdown in rental inflation will be welcome news to tenants and policymakers, among others," said Ronan Lyons, economist at Trinity College Dublin and author of the report.
"It is more likely driven by limits to affordability than improved supply, however.
"Availability on the rental market remains at levels that were unprecedented prior to 2015.
"For example, in the Dublin market, there were just 1,541 properties available to rent on August 1.
"While that's up from 1,121 two years ago, it's well below the average of 4,700 for the preceding decade.
"Building new rental supply remains critical to fixing the rental market.
"New figures in this report suggest that up to 25,000 new rental homes will be built over the coming few years.
"These will certainly help address the supply-demand imbalance. Stopping further inflation should be just the first target for policymakers, however.
"Bringing rents down to affordable levels must remain the ultimate goal."
Pierre Yimbog, president of Technological University Dublin Student Union, said that students renting remained at the mercy of the "critically undersupplied" market.
"It's having a negative impact on their studies, well-being, and future," he said.
"No tangible realistic solution has yet materialised."