Year-on-year inflation in rents eased back slightly between March and June but remain high at 8.6% nationwide, according to the latest quarterly Rental Report by Daft.ie. The national average rent between April and June was €934, compared to €860 a year previously. Inflation in rents peaked in late 2014, at 10.7%.
As in recent months, the slight slow-down in rental inflation nationally is being driven by trends in Dublin, where rent inflation has eased from 15% to 8.5% in the last 12 months. This means that, for the first time in this market cycle, rental inflation outside Dublin - at 8.7% - is greater than in Dublin.
Across the four other major urban centres, inflation in rents is also close to 10%, varying from 8.2% in Waterford and 8.9% in Limerick to 10.1% in Galway city and 10.4% in Cork.
Daft.ie says the stock available to rent remains extraordinarily tight. Just 4,600 properties were available to rent nationwide on August 1st, 2015, compared to 6,800 on the same day a year previously. By comparison, on August 1st 2009, there were over 23,000 properties available to rent nationwide.
Supply in the Dublin market has now been tight for nearly three years, with fewer than 2,000 properties on the market on average since late 2012.
In Munster, rents rose by an average of 6.4% in the year to March 2015, compared to a rise of 5.1% a year previously. In Waterford City, rents have risen by 8.2% in the last year and the average rent is now €629. In the rest of Waterford, rents were on average 6.6% higher in the second quarter of 2015 than a year previously. The average advertised rent is now €624, up 10% from their lowest point in 2013.
Commenting on the report, Ronan Lyons, economist at TCD and author of the Daft Report, said: "As students prepare for entering higher education, or returning from their summer break, they will find conditions every bit as tight as a year ago in Dublin - and in some places in the country even tighter. This reflects a continuing lack of construction at a time when the population is growing. In addition to addressing high construction costs, which are impeding all forms of supply, policymakers also need to examine whether accommodation specifically designed for students suffers from additional barriers to supply."
Speaking about the report, Marcus O'Halloran, UCD Students' Union president, said: "Even if rent is tied to inflation or capped, the underlying housing shortage means that students will still be pushed out of the market. Solutions specific to this corner of the market must be planned out."
He added: "700,000 Irish people live in leased houses and apartments. That number is increasing every day. Almost 10,000 tenants join the rental sector every month. Many of these people would prefer to own their home but they can't get a mortgage. However, they're still in a more stable position than most Irish students - even those with good references & part time jobs - and because of that they win out with landlords and will continue to win out even if rental prices are fixed."
Year-on-year change in rents - major cities, Q2 2015
Dublin: €1,368, up 8.5%
Cork: €889, up 10.4%
Galway: €818, up 10.1%
Limerick: €718, up 8.9%
Waterford: €629, up 8.2%