Rents continue to rise but at a slower pace according to RTB Rent Index
- The RTB Q3 2018 Rent Index shows rents continue to trend upwards, with national rent increasing to €1,122 in Q3 2018, an increase of €78 since Q3 2017
- The average rent for Dublin was €1,620 representing an increase of €141 from Q3 2017
- The results indicate that Rent Pressure Zones are slowing the pace of rent increases for existing tenancies
- Numbers of landlords falling despite high rental prices and record demand
According to the latest Rent Index from the Residential Tenancies Board (RTB), in the July-September period (Q3) of 2018, the standardised national average rent was €1,122 per month, up from €1,044 one year earlier (€78 increase). Conversely, on a quarter-on-quarter basis, rental price inflation dropped to 1.9% in Q3 2018, down from 3.6% in Q2 2018.
The RTB Q3 2018 Rent Index, which is compiled in conjunction with the Economic and Social Research Institute (ESRI), is the authoritative guide to the Irish rental market. The Index shows that rent increases for existing tenancies (5.4%) were lower than those for new tenancies (8%) year-on-year. This indicates that Rent Pressure Zones are having a braking effect on the level of the increase.
However, although rents are now at a record high, and the Irish rental market is experiencing unprecedented demand, the number of landlords is falling with a decline of 8,829 tenancies since 2015 and 1,778 fewer landlords than in 2016.
Commenting on the latest Rent Index results, Rosalind Carroll, Director of the Residential Tenancies Board said:
“Affordability still remains an issue for the rental market with continued economic, employment and population growth contributing to rising demand across the country. We can also see rents across the country have continued to increase year-on- year.
The rate of rent inflation slowed this quarter somewhat, and which we will continue to monitor in the months ahead. The importance of strong protections for tenants is underlined by the fact that the pace of rent increase under existing tenancies is well behind that of new tenancies, which shows us that Rent Pressure Zones are working much better within existing tenancies, but there is still more to do in respect of new tenancies.
At the same time, it is a matter of deep concern that the number of landlords continues to decrease. If we are to meet demand and ensure a well-functioning rental sector, then we need more landlords and different types of landlords to offer market options. With many landlords leaving, it is increasing strain and pressure and this must be addressed.
Unsurprisingly, Dublin is experiencing the most acute rent pressures with fewer than 15% of tenancies agreed at less than €1,000 per month, as compared to 70% elsewhere in the country. We can also see the Dublin rental sector is dominated by apartments (73%) as compared to less than one-in-two elsewhere.
This demonstrates the need for the sector to continue to be monitored closely. It will be important that the new legislation coming into effect in 2019, equips the RTB with sufficient powers to investigate and apply sanctions where there are contraventions to the rent restrictions in Rent Pressure Zones and that these powers can be implemented effectively.”
Dublin’s rental market continues to be the largest in the country in Q3 2018, accounting for nearly two-in-five tenancies (72%) that were registered with the RTB. As of Q3 2018, the standardised average rent for Dublin stood at €1,620, up from €1,479 one year earlier. This represents an increase of €141 euro on the standardised average monthly rent over a 12 month period or nearly a €12 increase per month.
Second highest rents in Q3 2018 were in Galway City at €1,187 per month. Cork City standardised average rents stood at €1,172 for Q3 2018, rents in Limerick City were €928 and rents in Waterford City were €638. On an annualised basis, rents in Limerick City have been growing most rapidly at 11.8% in Q3 2018.
The data is reported in the RTB’s Q3 2018 Rent Index report published today. The report is produced in conjunction with the ESRI and is based on 25,448 new tenancies registered with the RTB in the same quarter.
New vs Existing Tenancies
- Standardised average rent for new tenancies was €1,208 a month and for existing tenancies was €956, compared to €1190 and €936 respectively in Q2.
- Year-on-year growth for new tenancies was 8% as compared to 5.4% for existing, compared to 8.4% and 5.0% in Q2.
- One-in-five registered tenancies in Q3 2018 was an existing tenancy (i.e. leases that have been renewed after 4/6 years).
- Tenancies are lasting longer with a higher proportion of properties (25%) renting for over 12 months. In Q3 2018 approximately one in four tenancies lasted over a year. This trend highlights the increased importance of the rental sector.
- Dublin and the Greater Dublin Area accounted for 45% of all tenancies with 55% in the rest of the country.
- In total nearly two-in-five new tenancies registered were in Dublin highlighting the concentration of the rental market in the capital.
- The analysis also shows that in terms of the number of occupants, one or two occupants were in the majority of properties. Since Q4 of 2017, a slight decline in the shares of properties occupied by three or more people can be observed.
A summary of the figures from the report are below. To access the full Rent Index Report Q3 2018 findings and supporting info-graphic, you can download the information via the links provided:
Rent Index Results for Dublin
- Standardised average rents for Dublin as a whole stood at €1,620 (€141) within the Dublin market for Q3 2018 and €1,620 up from €1,595 in Q2 2018.
- Dublin growth accelerated to 9.5% year on year, up from 8.9% in Q2 2018.
- This is compares to rent highest in Dublin City and stood at €1.583 on Q3 2018.
- Dublin growth driven by apartments, which saw annual growth of 11.7% compared to 6.5% for houses.
- The quarter-on-quarter growth rate in Dublin was 1.6% in Q3 2018. This represents a decrease from the 4.4% rate in Q2 2018.
Greater Dublin Area (Meath, Kildare, Wicklow)
- To provide a comparison to the Dublin area, results are presented for the Greater Dublin Area excluding Dublin (GDA).
- The standardised average rent for the GDA (excluding Dublin) stood at €1,149 up from €1,079 (€70 increase) year-on-year.
- The quarter-on-quarter growth rate in the GDA (excluding Dublin) was 2.1% in Q3 2018, an acceleration from 1.8% in Q2 2018. On a year-on-year basis, GDA (excluding Dublin) rents were up 6.5%; this represents an increase from 5.4% year-on-year growth in the second quarter of 2018.
- To capture rental pressures in the rest of the country, a Rent Index is presented for the rest of the counties outside the GDA.
Rest of the country
- The standardised average rent for outside the GDA stood at €859 up from €806 year-on-year.
- The quarter-on-quarter growth rate for the rest of the country was 4.3% in Q3 2018. On a year-on-year basis, rents outside the GDA were up 6.5%.
- Second highest rents in Q3 2018 were in Galway City at €1,187 per month. Cork City standardised average rents stood at €1,172 for Q3 2018, rents in Limerick City were €928 and rents in Waterford City were €638.
- Galway City grew at the slowest rate of the five cities at 1.3% your-on-year in Q3 2018.
- However, rents in Limerick City have been growing most rapidly at 11.8% on an annual basis in Q3 2018. Rents in Waterford City grew 10%year-on-year in Q3 2018.
- In the present quarter, it is noteworthy that three of the five cities experienced double digit year-on-year rental price growth.
 The GDA contains counties Meath, Kildare, Wicklow. The standardised average of these counties presented in the counties table does not equal the GDA figure as this is estimated from a separate regression for the high level regions.
NOTES TO EDITOR:
Many Irish renters live in urban centres and prefer to live close to jobs and amenities. To provide more insight into rental developments across cities in Ireland, we present standardised average rents for each of the cities. The data are presented in Table 7. (See page 20 of the RTB Rent Index Q3 2018)
Rental Developments across cities RTB Rent Index – Irish Cities Index Q3 2018
|Table 7: RTB Rent Index – Irish Cities|
|Index Q3 2018||Standardised Average Rent Q3 2018||Standardised Average Rent Q2 2018||Q-o-Q Change (%)||Standardised Average Rent Q3 2017||Y-on-Y Change (%)|
The Residential Tenancies Board and the Rent Index report
The RTB Rent Index is the most accurate and authoritative rent report of its kind on the private accommodation sector in Ireland, as it is based on actual data from all new tenancy agreements registered with the RTB nationally in Q3 this year.
This regulatory data is more accurate than any other samples informing other reports or indices. The Residential Tenancies Board (RTB) is a public body set up to support and develops a well - functioning rental housing sector. Our remit covers both the private rental sector and not-for-profit housing providers also referred to as Approved Housing Bodies.
Our role is to regulate the rental sector; provide information to tenants and landlords; maintain a national register of tenancies; resolve disputes between tenants and landlords; conduct research and provide information to inform policy.
Information, education and research
We provide high quality information to tenants and landlords as well as to the general public to help them understand their rights and responsibilities.
We also provide accurate and authoritative research and data on the rental sector, such as the RTB Quarterly Rent Index, which allows us to monitor trends in the rental sector and also allows individuals to compare rents in particular locations.
All private residential landlords and Approved Housing Bodies are obliged to register their tenancies. A public register is available on our website. The registration of tenancies enables us to collect important data on the sector, and is also a key part of regulating and supporting the sector and ensuring landlords and tenants are aware of their rights and responsibilities.
Dispute resolution services
Since 2004, we have replaced the courts in dealing with the majority of disputes between landlords and tenants through our Dispute Resolution Service. This service offers a choice of resolution types to parties – mediation or adjudication.
For more information, please see www.onestopshop.rtb.ie