The RTB/ESRI Report produced by the Residential Tenancies Board (RTB) and the Economic and Social Research Institute (ESRI) provides rental indicators (the Rent Index) generated to track price developments in the Irish rental property market. The standardised average rent published on a quarterly basis covers all new registered tenancies within that quarter which are submitted to the RTB and excludes all existing registered agreements. While trends in the standardised average rent provide an understanding of how prices are developing in the rental sector, the Report also provides an insight into the composition of the market, the type of properties rented, the length of tenancies and other factors. The data covered in the Q1 2020 Report predates the introduction of public health and emergency tenant protection measures to manage the Covid-19 pandemic.
The Dublin rental market is the largest in the country accounting for 40.8 per cent of the tenancies that were registered with the RTB. The GDA excluding Dublin accounted for a further 9.0 per cent with 50.2 per cent of tenancies relating to the rest of the country.
Overall national trends show that the year-on-year growth rate of the national standardised average rent was 5.4 per cent higher in Q1 2020, compared to Q4 2019 while the average rent increased from €1,221 to €1,231 in Q1 2020.
Variations with standardised average rent were evident across the country with rents for Dublin dwellings being significantly higher than those observed elsewhere. The highest standardised average rents were in Dublin at €1,735, the lowest standardised average rent was Leitrim at €550 per month.
Apartments and flats represent a higher share of properties in Dublin when compared to the rest of the country. In total, 71.9 per cent of rental contracts in Dublin in Q1 2020 were for flat or apartment type accommodation.
The national standardised average rent for apartments continued to increase; 1-bedroom increased by 4.8 per cent to €1,181, 2-bedroom apartments increased by 5.4 per cent to €1,309 and apartments with 3 or more bedrooms increased by 3.7 per cent to €1,454 when compared to Q1 2019. The national standardised average rent for houses also increased; 1-bedroom house was €1,053, 2-bedroom house increased to €1,134 while 3-bedroom house increased to €1,159 nationally.
Most tenancy agreements last between 10 and 12 months. As of Q1 2020, 32.8 per cent of registered tenancies had a duration of greater than a year. Over the last number of quarters, there has been a general increase in tenancies of greater than 12 months. The trend towards a higher share of properties with over 12 months contract duration is consistent with the increased importance of the private rented sector.
Not all properties in a Rent Pressure Zone (RPZ) are subject to the 4 per cent cap on annual increases as there are certain qualifying conditions where a property is treated as exempt. In Q1 2020, the RTB received a total of 221 exemption notifications from landlords. It is expected over time, as these regulations become more embedded in the sector, the RTB will receive more Exemption Notifications as landlords choose to invest in upgrading the rental stock.
In recent years, house purchasing affordability factors and increased demand have led to the upward pressure on rents. While the Covid-19 crisis has presented new challenges for both landlords and tenants alike, rental price inflation is showing to have moderated since the pandemic began.