Rents in Dublin grew by 3.3% in Quarter 2 2017
According to the Residential Tenancies Board, private sector rents grew 6.6% in the year end to the end of June this year. However, the rate of increase in the second quarter was marginally slower than in Quarter 1. The standardised average national rent stood at €1,017 per month in Q2, 2017 – up by €63 – compared to the same period last year, when it was €954.
While the quarter-on-quarter growth was relatively flat in Q1, 2017, the pace of growth has accelerated in the second quarter. Standardised rents increased 2.9% quarter-on-quarter in Q2, 2017, up from 0.04% in Q1.
Demand for rented accommodation in Dublin is very high as evidenced by rents in the capital now being 10.8% above their previous peak in Q4, 2007. Overall rents in Dublin increased in Q2, 2017 by 3.3% compared to the previous quarter. Rents for Dublin apartments are now 14.7% above the previous peak of Q4, 2007, while outside Dublin rents are 3.8% below their 2007 peak levels.
This data is contained in the Q2 2017 Rent Index Report of the Residential Tenancies Board (RTB), produced in conjunction with the Economic and Social Research Institute (ESRI). The Rent Index is the most accurate and authoritative rent report of its kind on the private accommodation sector in Ireland because it is based on the actual rents being paid for over19,000 new tenancies registered with the RTB during the quarter.
The RTB Quarterly Rent Index now comprises two sets of rental indicators for the Irish market. The main Index is compiled on the basis of rents registered with the RTB for each Local Electoral Area (LEA) throughout the country, and was developed following the introduction of Rent Pressure Zones by the Government in December 2016. Based on the rental data of this latest Rent Index, two additional LEAs meet the designation criteria for rent pressure zones: Drogheda and Greystones.
In terms of the Dublin market, overall rents in Dublin increased in Q2, 2017 by 3.3% compared to the Q1 2017. This increase was mainly driven by an acceleration in rents for apartments, which were up 4.4% quarter-on-quarter. Private rents for Dublin houses also rose in Q2, 2017, albeit at a more modest 0.9%.
On an annual basis, rents continued to grow, increasing by 5.8% in Dublin. In Q2, 2017, there was some evidence of a moderation in the pace of expansion for Dublin houses, continuing the trend seen in the first quarter. Also for Dublin apartments, the year-on-year growth rate dropped from 7.4% to 6.8% in Q2.
Outside Dublin, rents for houses and apartments continued to grow, both on a quarterly basis and an annual basis. The quarter-on-quarter growth rate overall was 3.1% in private sector rents, representing an increase from 1.3% in Q1, 2017. Annual growth rates also appeared to be consistent, at 8%, in line with the previous quarter. Behind the headline figure, there had been acceleration in apartment rental price growth outside Dublin on an annualised basis, increasing to 9.3% year-on-year.
Commenting on the report, the Director of the RTB, Ms. Rosalind Carroll, said: “The findings for the second quarter of this year are a further reflection of the ongoing pressure in the rental sector as demand continues to outstrip supply, and with two further areas, Drogheda and Greystones, meeting the RPZ criteria. These results reflect the second quarter since RPZs were first introduced. It is still too early to identify trends from these results, particularly in such a volatile market with restricted supply.
“Annually in the Dublin market we have had 3 quarters showing decline in the annual rate of growth from 8.5% to 6.4% and 5.8% respectively. However, we did see quarter on quarter growth of 3.3% in Quarter 2 in Dublin and we would have liked to have seen more evidence of further dampening of the market. It is important to note, when looking at the results of the Rent Index that new supply, not rented before, is exempted from the RPZ measures and therefore the results for RPZ areas are a reflection of RPZ and non-RPZ rented dwellings”.
“We would encourage any existing, or new tenants, who are faced with increases over and above the 4% cap to refer a dispute to the RTB, and the same advice applies to tenants entering a new tenancy. Even if a tenant has agreed to a rent in excess of the limit and signed a tenancy agreement, they are still protected under the law; they cannot contract out their rights. If a landlord has been found not to have not adhered to the limits, it can have significant consequences and damages of up to €20,000 can be awarded as well as repayment of the additional rent. Cases can be referred to the RTB up to six years after the tenancy was in place”.