The RTB/ESRI Q3 2020 Report produced by the Residential Tenancies Board and the Economic and Social Research Institute tracks price developments in the Irish rental housing market. This Report is based on actual rents paid on 25,193 private tenancies registered with the RTB in Q3 2020, made up of homes new to the rental sector, new tenancies in existing housing stock and renewals of existing tenancies. This is the highest number of private tenancy registrations in a single quarter since Q3 2018.
The moderation in rental price growth that has occurred since the onset of the Covid-19 pandemic continued in the third quarter of 2020. The drop in rental price growth since the onset of the pandemic has been greater in Dublin than elsewhere which reflects the differing impact of the Covid-19 economic shock on both the demand and supply sides of the market in the short term.
In Q3 2020, 82.3 per cent of registered tenancies were new registrations with the 17.7 per cent being renewals. Dublin and the Greater Dublin Area excluding Dublin (GDA) account for just over half of all tenancy agreements; County Dublin accounted for 45.5 per cent of tenancies in Q3 2020, the GDA accounted for a further 7.6 per cent with 46.9 per cent of tenancies relating to the Rest of the Country.
As of Q3 2020, rents in Dublin are nearly twice the level outside Dublin at €1,758 per month as compared to €965 per month. The standardised average rent in the GDA stood at €1,254 as of Q3 2020.
The national standardised average rent stood at €1,256 in Q3 2020, a rise of 2.5 per cent (or €31 per month) on the previous quarter. On an annualised basis, rents grew by 1.4 per cent in the third quarter of 2020. This growth rate is down marginally on the previous quarter and is a continuation of the drop in rental inflation that has occurred since the Covid-19 pandemic began.
The contrast between Dublin and the Rest of the Country in Q3 2020 is very clear, with 63.2 per cent of rents over €1,500 in the capital, and another 28.0 per cent between €1,001 and €1,500. In the Rest of the Country, the largest share of rents corresponds to the €501 to €1,000 category at 54.0 per cent while only 10.8 per cent are above €1,500. While it is understandable that rents are higher in Dublin due to higher incomes and the higher level of demand, it is noteworthy that, in Q3 2020, only about 8.8 per cent of rental contracts were agreed at €1,000 or less.
The standardised average rent for houses stood at €1,213 per month in Q3 2020, a rise of 2.5 per cent (or €30 euro per month) on the previous quarter and a marginal rise of 0.4 per cent year-on-year. The standardised average rent for apartments stood at €1,311 per month in Q3 2020, a rise of 2.4 per cent on the previous quarter and a rise of 2.5 per cent year-on-year. The inflation rate for apartments is significantly higher than for houses on a year-on-year basis.
The economic context determines the drivers of rental inflation in Ireland. For now, economic developments are tied completely to Covid-19. The loosening of measures in Q3 2020 saw recovery and increased economic activity. The resurgence of the virus in September and October 2020, and the increased public health restrictions has brought with it an increase in the unemployment rate and this is likely to depress spending activity in the latter part of 2020.