The latest Residential Tenancies Board (RTB) rent index shows that, nationally, rents rose by just under 10% in the second quarter (Q2) of this year, when compared with a year earlier. The index also shows that significant increases were not confined to the Dublin region, but also occurred in other parts of the country. And in Dublin, rents are now at a new peak level, 3.9% higher than the previous peak which occurred in Q4, 2007. While rents are increasing outside of Dublin, rents remain 11.2% off their peak levels.
This data comes from the RTB’s Quarterly Rent Index which is compiled by the Economic and Social Research Institute (ESRI) on behalf of the RTB. It is the most accurate and authoritative rent report of its kind on the private accommodation sector in Ireland. This is because it is based on 22,103 new tenancies which commenced in April, May and June this year, and which were registered with the RTB. It reflects the actual rents being paid, according to the RTB’s records, as distinct from the asking or advertised rent.
On an annual basis, nationally, rents were 9.9% higher than in Q2, 2015; up from €869 to €956. Nationally, rents for houses were 9.3% higher annually in Q2 (up from €850 to €929), while apartment rents were 11.7% higher than in the same quarter of 2015 (up from €908 to €1,014.
Annual growth in the Dublin market was also strong, up by 9% (from €1,251 to €1,364). Dublin house rents were up by 7.5% (€1,388 to €1,492) and Dublin apartment rents were higher by 9.8% (€1,246 to €1,368). Annual growth in rents for the market outside Dublin recorded increases of 10.6% when compared to Q2, 2015; up from €669 to €740. Again the performance differed by property type. Monthly rent for houses outside Dublin increased by 9.9% (from €688 to €756), while apartments outside Dublin experienced an increase of 12.7% (€647 up to €729).
Turning to the quarter on quarter picture that emerges from the Index, at a national level monthly rent levels rose in Q2, 2016 by 3.6% when compared to Q1 of this year. This compared to a growth rate of just 0.2% in Q1, 2016. Looking at trends in more detail, at a national level, monthly rents for houses and apartments showed a similar rate of growth, with growth rates of 3.6% and 3.5% respectively, when compared with Q1 this year.
Rents in Dublin grew by 4.5% when compared with no growth in Q1 this year. While rents for houses in Dublin increased by 3.1%, rents for Dublin apartments rose by 5.4% quarter on quarter.
The rent indices for properties outside Dublin show rents in Q2, 2016, when compared with Q1, were up by 2.9%. Rents for houses outside Dublin recorded a quarterly increase of 3.8%. The index for apartment rents outside Dublin increased by 3.6% in the second quarter of 2016.
The Rent Index shows that, nationally rents peaked in Q4, 2007, before declining by 25.4% to their trough in Q1, 2012. By Q2, 2016 rents nationally were 5.7% lower than their peak. While the peak-to-trough in the Dublin market was similar to that experienced nationally, the strength of the rent rises in Dublin means they are now 3.9% higher than their previous peak in Q4, 2007. In contrast, the market outside Dublin has experienced more subdued growth, with rental levels now 11.2% their peak levels.
Commenting on the latest Rent Index findings, the Director of the RTB, Ms. Rosalind Carroll, said: “While the previous two quarters have shown a slowdown in the rate of increase in rents, the Q2 2016 results show the rate of growth in rents increasing again, particularly in the Dublin market. Adding to the underlying supply and demand imbalance is the return of net inward migration as confirmed by the Central Statistics Office last month (+3,100) for the first time since 2009”.
Ms Carroll said the RTB now has a total of 323,271 tenancies registered, representing 172,121 landlords and 704,332 occupants.
“The trend in new tenancy registrations also reflects the supply shortage. Annual tenancy registrations peaked in 2013, with nearly 112,000 tenancies registered in that year, but that has dipped consecutively in 2014 and 2015, while our overall numbers of registered tenancies have increased. This suggests that tenants are staying longer in their properties”.
The RTB rent index is being expanded to provide additional information on the rental sector and for the first time also provides details on the types of properties being rented.
Data from the RTB Rent Index confirms that Dublin remains the largest rental market, with Dublin post codes accounting for close to one third of properties on the market, while other urban centres (Cork, Limerick, Waterford and Galway) account for 14% of rental properties.
Two-bed and three-bed properties are the most common property size, accounting for 69% of properties rented in Q2, 2016. Properties with a rent of over €300 per week account for 25% of properties rented in Q2, 2016, the same as Q4, 2007, the previous market peak. In contrast, at the beginning of 2013, properties with a weekly rent of greater than €300 euro represented just 7%.
The RTB website www.rtb.ie (click on “rent index”) also contains an Average Rent Dataset which enables people to check the average rent being paid for five different categories of dwelling types throughout the country, in both urban and rural areas. This means people can check what is the actual rent being paid for, say, a semi-detached house or a two-bed apartment in their neighbourhood, or in other parts of the country.
All landlords are legally obliged to register tenancies with the RTB and the number of new registrations with the RTB in Q2, 2016, was 22,103.
The RTB Index is of assistance for a range of Government purposes, including housing policy generally, and informing the Department of Social Protection’s Rent Supplement scheme. It is also an important reference document in landlord/tenant disputes on rent
The ESRI works towards a national vision of ‘Informed policy for a better Ireland’. This means producing high-quality analysis to provide robust evidence for policymaking, with the goals of research excellence and policy impact.
The ESRI produces research that contributes to understanding economic and social change in the new international context and that informs public policymaking and civil society in Ireland.