Irish Rents Surge 4.4% in Q1, Daft.ie Report Links Rise to New Controls
Irish quarterly rents rose by a record 4.4% from December to March, coinciding with new government rent controls allowing landlords to reset rents to market rates between tenancies. While the government aims to increase supply and renter security, critics argue the measures will raise rents. Limited housing availability is driving the surge, with long-term supply increases expected to take years.
Irish quarterly rents increased by a record 4.4% between December and March, according to a Daft.ie report. This surge coincided with the Government’s new rent control system, implemented in March, which allows landlords to reset rents to market rates between tenancies. The new rules permit rent increases of 2% or the rate of inflation, whichever is lower, for existing tenants.
Goodbody chief economist Dermot O’Leary noted many properties were previously let below market levels, suggesting the Q1 increase reflects a return to market rents for re-let properties. Minister for Housing James Browne stated the measures aim to provide certainty for renters and incentivize investment to boost supply, offering new six-year tenancies for greater security.
Critics, like Rosaleen Leonard of the Community Action Tenants Union, argue the changes will lead to higher rents. John-Mark McCafferty of Threshold highlighted the Government's attempt to balance renter and landlord needs. Trinity College economics professor Ronan Lyons, author of the Daft report, attributed the rent surge to limited rental housing availability, with price effects appearing faster than any supply increase.
The Daft report also showed a 4% drop in rental home availability for the quarter, largely due to a 23% year-on-year decrease in Dublin, despite a 29% rise elsewhere. O’Leary suggested landlords delayed advertising properties until the new rules took effect. Lyons stated overall supply remains constrained and the recent increase is unlikely to be a sustained improvement. Both O’Leary and Lyons agree that increasing supply will take years, emphasizing that stable housing policy is crucial for a stable system, with higher interest rates and construction costs also impacting short-term supply.