Rise in residential rents in Dublin and Cork as a result of a shortage of new homes

Last Friday's Irish Examiner reported that "A shortage of new homes in Dublin and Cork has seen a surge in residential rents since January, the biggest in five years.

2013 got off to a strong start for Ireland’s residential lettings market, particularly in Dublin, according to property consultants Savills Ireland. With unprecedented demand for rental property, Savills say rents have started to increase in many areas and this pace looks set to continue. Rents in most parts of Dublin are now between 2-4%higher than they were a year ago with some developments seeing increases of up to 8% year on year. Savills Cork report a similar trend with rents up 5% in the greater Cork area. The Savills report mirrors the results of a new monitor of housing market activity, published yesterday by the Irish Banking Federation" View Irish Examiner Article Here

Clarie Neary of Savills Ireland, “We’ve seen a higher rise in rents in the last month than at any time in the past 5 years and 2013 is likely to see rents continue to rise in prime areas of Dublin. The shortage of properties is exacerbating the problem and we believe that while many people are reluctant to buy, rents will continue to push up even further in these high demand areas.

Landlords have added up to 8% on rents on some schemes and we’ve had no difficult in renting them out to good quality tenants. Figures from Daft.ie show clearly the growth of Ireland’s rental market over the last few years - in Dublin 2012 there was 4,200 rental properties on the market compared to 5,400 in 2011 and 6,500 in 2009. On Nov 01st there were just 2,200 properties available in Dublin to rent.  Go to Savills- News Page Here

Meanwhile on the 11th February daft.ie issued a press release saying "Rent inflation and the pull of cities" - 
The average national rent rose 2.2% during 2012, representing the first annual rise in rents since 2007, according to the latest Daft.ie Rental Report. The average rent nationwide in the final quarter of 2012 was €808, compared to €790 in late 2011.

The increase in rents is being driven by Ireland's largest cities. Rents in Dublin, Cork and Galway experienced their second consecutive year of growth, with annual rises of 6.4%, 1.8% and 2.3% respectively. The number of properties available to rent nationwide is also at its lowest since mid-2008.

Rents elsewhere continued to fall, with annual drops of 1.1% in Limerick city and 2.8% in Waterford. Average rents outside of the cities experienced their smallest annual decline since the start of 2008 but were still down by 1.1%.

Commenting on the report, Ronan Lyons, Economist with Daft.ie, said: "While much of the country is still dealing with a glut of properties from the bubble, it is increasingly evident that there is a shortage of rental properties on the market in urban areas, and in particular Dublin. This may be alleviated temporarily by stock currently held in NAMA coming on to the market, but ultimately Ireland's major cities will need to prevent future inflation in rents by planning for new construction."

Year-on-year change in rents - major cities, Q4 2012 Dublin: €1,089, up 4.9% Cork: €797, up 1.8% Galway: €780, up 2.3% Limerick: €638, down 1.1% Waterford: €597, down 2.8%.
Full Report Here