Through the roof: average rents hit €1,598
THE cost of renting in new tenancies has soared by 11 per cent in the space of a year, as the slowdown of new properties coming on to the market continues.
The latest quarterly report by the Residential Tenancies Board (RTB) and Economic Social and Research Institute (ESRI) shows that the average new standardised rent nationally is €1,598, an increase of 11 per cent in the past 12 months.
In comparison, the average monthly rent in existing tenancies – many of which are subject to annual caps of 2 per cent increases in designated rent pressure zones (RPZs) – was €1,357, up 5.2 per cent in the same period.
The report found that those in new tenancies were paying 17.7 per cent higher rent – or around €240 a month – than those in existing tenancies.
The higher cost of new tenancies is driven by the absence of RPZ rent caps and a shortage of new properties on the market.
The biggest gap between the cost of new and existing tenancies is outside of the Greater Dublin Area, which encompasses Kildare, Meath and Wicklow, where it was almost 25 per cent (€249) higher.
New tenancies outside of the Greater Dublin Area were €1,253 per month compared to €1,004 for existing tenancies
Kildare (13.5 per cent) had the smallest discrepancy between new and existing tenancies.
The report found that larger homes, of at least four bedrooms, saw the biggest increases in rent year on year.
The average cost of renting a new home with at least four bedrooms was €1,883, an increase of 13.4 per cent, while existing homes increased their rent by 6.5 per cent to an average €1,512. Existing tenancies in rent pressure zones are capped at increases of 2 per cent annually. RPZs are currently in operation in 19 counties.
The report does not track compliance with this legislation but the RTB insist that they are increasing active monitoring of individual tenancies.
Concerns have been raised by opposition parties previously that RPZs are not being adhered to.
The RTB study found that although 75 per cent of people surveyed were living in RPZs, only 33 per cent were aware that their home was subject to the rent caps. The report for the third quarter of 2023 shows that the level of new tenancies fell sharply, by 38 per cent year on year as landlords continue to exit the market.
In last year’s Budget, the Government introduced tax relief of between €600 and €1,000 for landlords who stay in the market for the next four years, in a bid to retain those already in the market.
The report also shows a wide range of rents nationwide.
The lowest rents in the country continue to be in Co. Leitrim, where the standardised average rent in an existing tenancy is €698. In contrast the highest rent is for new tenancies in Dublin, where the report found the standardised rent was €2,113.
Within the capital there is significant variance, with Dun Laoghaire Rathdown having the highest rent for new tenancies at €2,412, while in Fingal it was €2,021.