Rents Surge 4.4% in Q1 2024, Largest Quarterly Increase on Record

Irish rents surged by 4.4% between December and March, marking the largest quarterly increase on record, according to a new Daft.ie report. This rise coincides with the implementation of the government’s new rent control system in March, which allows landlords to reset rents to market rates between tenancies.

The new regulations permit landlords to increase rents by 2% or the rate of inflation, whichever is lower, while tenants gain greater security with new six-year minimum duration tenancies. Annual rent inflation reached 7.8% in the quarter, up from 4.1% a year ago. The average monthly rent nationwide for a two-bedroom apartment was €2,176. Rents in cities saw significant year-on-year increases: Galway (18%), Cork (13%), Limerick (10%), Waterford (8%), and Dublin (6.9%).

Ronan Lyons, author of the report and Trinity College Dublin economics professor, noted that this sharp surge stands out even against pandemic volatility. He attributes it to landlords utilizing the new rule allowing rent resets to market levels when tenancies end, aligning rents with prevailing market conditions. The report also indicated that 2,374 homes were available to rent nationwide on May 1st, a 4% reduction from the previous year and the third lowest availability for early May since 2006.

Lyons stated that rental housing availability remains very limited, leading to the new system’s price effects appearing more quickly and clearly than any increase in supply. Sinn Féin housing spokesperson Eoin Ó Broin criticized the surge as a direct consequence of the government’s decision, calling for an immediate ban on rent increases, citing increased financial hardship for renters.