Monthly residential rents in Ireland up 7.1% quarter on quarter, latest index shows
Monthly rents for private sector accommodation across the Ireland increased by 7.1% in the second quarter of this year compared with the same period last year, the latest published data shows.
Nationally, rents for houses were 6.4% higher, while apartment rents were 7.6% higher than in the second quarter of 2014, according to the data from the Private Rented Tenancies Board (PRTB) which is regarded as the most accurate and authoritative rent report of its kind on the private accommodation sector in Ireland.
Annual growth in the Dublin market was stronger, up by 9.2%. Dublin house rents were up 8.8% and Dublin apartment rents were higher by 9.4%. However, annual growth in rents for the market outside Dublin remains more subdued, recording growth of 5.8% when compared to the second quarter of 2014.
There is also a gap in the performance by property type. The rent for houses outside Dublin increased by 5.8%, while apartments outside Dublin experienced an increase of 5.9%, according to the data which is based on actual rents being paid rather than asking or advertised rents.
The rent for private sector accommodation across the whole country in was €878, up from €820 in the second quarter of 2014. The rent for apartments nationally was €922 compared to €857 a year earlier and for a house it was €853 compared to €801 a year earlier.
In Dublin, the rent was €1,387 for a house and €1,260 for an apartment compare to €1,275 and €1,152 respectively in the second quarter of 2014. This represents a monthly increase in Dublin rent of €112 for a house and €108 for an apartment over the course of the 12 month period.
Outside Dublin, the rent was €677, with houses averaging €695 and apartments €660. A year earlier, these figures stood at €640, €656 and €623 respectively. This represents a monthly increase in rent outside of Dublin of €39 for a house and €37 for an apartment in the 12 month period.
Looking at the quarter on quarter picture for 2015, nationally the rate of increase in monthly rent levels was 2.9% in the second quarter of this year compared to the first quarter of 2015. This compares to a national quarterly growth rate of 1.3% in the first quarter of 2015.
Looking at trends in more detail, monthly rents for houses recorded quarter on quarter growth of 2.4% in the second quarter of the year, while rents for apartments grew by 3% when compared with the first quarter of 2015.
The results show quarterly growth in rents outside Dublin of 2%, with rents in Dublin showing stronger growth of 4.2% in the quarter. Rents for houses in Dublin grew by 2.9% compared to the first quarter of 2015, while Dublin apartment rents were higher by 4% in the quarter
The rent indices show, for properties outside Dublin, rents in the second quarter of 2015, when compared with the first quarter of the year, were up by 2%. The growth in rents outside Dublin primarily reflects an increase in rents for houses, up by 2.3% on a quarterly basis, while rents for apartments outside Dublin were up by 1.5% when compared to the first quarter of 2015.
The index also shows that, nationally rents peaked in the fourth quarter of2007 before declining by 24% to their trough in the first quarter of 2012. By the second quarter of 2015 rents nationally were 13.1% lower than their peak.
While the peak to trough in the Dublin market was similar to that experienced nationally, the strength of the recovery in Dublin means that rents now are just 3.5% lower than their highest point. In contrast, the market outside Dublin has experienced more subdued growth, and rental levels remain over 18% off their peak levels.
The figures are evidence that predictions that new mortgage restrictions introduced by the Central Bank last February would displace owner occupier demand into the private rented sector were correct, according to John McCartney, Savills’ director of research.
However, according to McCartney, this is only the first stage of a process that will see a resumption of house price growth in the capital. ‘House prices in Dublin have stalled for now. However rising rents are now pushing up residential yields,’ he said.
‘This will attract buy to let investors who currently cannot get decent returns on deposits and bonds due to low interest rates. This investor activity will continue until house prices have been driven back up to a point where yields are no longer attractive,’ he explained.
McCartney added that the net effect of this process will be a higher ratio of investors to owner occupiers in the housing market.