The year-on-year increase in the average rent nationwide accelerated to 7.1% in the final quarter of 2013, up from 2.2% a year previously, according to the quarterly Daft.ie Rental Report released this week.
The average advertised rent nationwide is now €865, compared to €790 two years ago.
In Offaly, rents were on average 2.1% higher in the fourth quarter of 2013 than a year previously however they are well below the national average as average advertised rent in Offaly is now €563, which is a fall of 27% from the peak.
Offaly is ahead of the curve for the region as across the Midlands counties of Laois, Westmeath, Offaly and Longford, rents rose by an average of 1.4% in the year to December 2013.
The acceleration in rent inflation nationally is due mainly to trends in Dublin, with rental inflation in the capital rising from 4.9% to 11.2% in the same period. Rents are now 17.6% higher than their lowest point in this cycle, which occurred three years ago, and 15.7% below peak levels of 2007. The rent increases are related to very tight supply, with fewer than 1,500 properties available to rent in Dublin on February 1, compared to over 6,700 on the same date five years previously.
Outside Dublin, rents in the other cities are rising but less rapidly, with the exception of Waterford city, where rents continue to fall, at a rate of 0.6% year-on-year. In Cork and Galway cities, rental inflation is above 4% (at 4.2% and 4.4% respectively), while in Limerick, the annual increase in rents has been 3.6%. Outside the cities, rents rose by 4.6% in Leinster but were largely static in Munster (a rise of 0.8%) and Connacht-Ulster (no change).
Commenting on the report, Ronan Lyons, economist at TCD and author of the Daft Report, said: “The on-going acute shortage of rental accommodation in Dublin continues to affect rents in the capital. With no sign of new supply coming on stream any time soon, the onus is now on the government to encourage construction in the capital. This could be best done with reform of land use and the planning process. Elsewhere, rents are largely stable, although if rents continue to rise at close to 5% a year in other cities and in Leinster, this will be problematic for Ireland’s competitiveness.”
The full report is available from www.daft.ie/report and includes a commentary by Ronan Lyons, Assistant Professor of Economics at Trinity College, Dublin, and author of the Daft Report, as well as an analysis of affordability and statistics on residential yields around the country.