Advertised rents rose at a slower pace last year than in the previous two years, but still climbed by 6.8% new data from property listings website Daft.ie shows.
Nationally the average rent sought on the open market during the last three months of the year was €1,850 a month.
That was up just 1.6% on the previous quarter, but compares to €1,365 in early 2020, illustrating the significant rise in the cost of renting for many in the intervening four years.
However, the rate of increase in rents sought did moderate last year, driven by a fall-off in the pace of inflation in Dublin.
There, advertised rents climbed by 2.6% in 2023.
Outside of the capital, the rate of increase was considerably higher at 10.6%.
The ongoing rise in open market rents continues to be driven by a shortage of available rental accommodation.
“The construction of significant amounts of new homes to rent in Dublin over the last two years is reflected in the near-disappearance of inflation in market rents in the capital,” said Dr Ronan Lyons, Associate Professor of Economics and TCD and the report author.
“This is a welcome reminder that the basic economics of supply and demand work in rental markets and thus that new supply is the answer to strong rental demand.”
At the start of February, just 2,200 homes were listed for rent on Daft.
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That is up 6% on the same date a year ago and marks the 11th month in a row of year on year increases in availability.
It should also be remembered that homes are advertised on other property listing platforms, while some properties are let without being advertised at all.
Over the course of 2023, rents in Cork and Waterford cities rose by between 7% and 8%.
But in Galway and Limerick cities the level of inflation was even stronger at 11.3% and 14% respectively.
Excluding the cities, the smallest annual increase was seen in Dublin’s commuter counties at 7.5%.
The biggest increase was seen in the three Ulster counties, where market rents were almost 17% higher than a year earlier.
“The need for new accommodation remains – and outside Dublin hasn’t been addressed at all,” said Dr Lyons.
“Unless policy actions are taken to change course, over the next few years, the number of new rental homes built in Dublin will fall again, while it will remain close to zero elsewhere in the country.”
