The recorded annual growth in the standardised average rent increased to 8.3 per cent nationally in the period to Q1 2019, marking the highest rate of annual rent price inflation since Q2 2016. Despite Q4 2018 marking a notable fall in rent prices during the quarter, the first quarter of 2019 once again marked a rise in rent prices of 2.1 per cent in Q1.
Standardised average national rent for both houses and apartments increased in the year to Q1 2019 as 19 new areas come under Rent Pressure Zone legislation. Average national rents for houses stood at €1,129 in the first quarter of this year, an increase of €85 on the previous year, while average rents for apartments stood at €1,225, an increase of €90. The standardised national rent for both houses and apartments also increased on a quarterly basis, from Q4 2018.
Although the index saw an overall dip in Q4 2018, an unprecedented trend in more recent times, the index increased again in Q1 2019. With the RTB attributing the falloff in the last quarter to seasonality, it also notes a marked increase in the number of tenancies registered in Q1 2019, increasing from 17,830 registered in Q4 2018, to 21,004.
Looking more closely at the split of new and renewal tenancies and how the rent increases for both affect the overall standardised national average, with only 18 per cent of the tenancies registered in the first quarter being renewals. The annual growth rate of standardised average rent was higher for new tenancies (described as “unsurprising” due to the restrictions in place for ‘Part IV’ renewal tenancies). The standardised national rent for new tenancies increased by 8.7 per cent in Q1 while part IV renewals increased by just 6.7 per cent in comparison.
The concentration of the rental market in Dublin is apparent with two out of five of total new tenancies registered in the capital in 2019.
Along with the concentration of tenancies apparent in the capital city, Dublin also represents an area of corresponding price pressure, as presumably higher demand is inclined to push prices up. Just over 11 per cent of agreed tenancies in Dublin were for under €1,000, compared to over 70 per cent under that level elsewhere. Meanwhile, over 55 per cent of tenancies in Dublin had their rents set at over €1,500, compared to just over 5 per cent in other areas.
Albeit that the trend of rising rent prices returned in the first quarter of 2019, on a positive note a clear trend has emerged of longer-term tenancies with almost 30 per cent now for periods longer than 12 months compared to just over 20 per cent in Q1 2014.