'Sharp' increase in rent prices as new rules in effect

Rent prices in Ireland have surged sharply following the introduction of new government rent reforms on March 1. According to a report from property website Daft.ie, average market rents increased by 4.4% between December and March, marking the largest quarterly rise since 2002. The average rent for a two-bedroom apartment now stands at €2,100, more than one third above pre-pandemic levels and nearly 80% higher than a decade ago. Despite this, the availability of rental properties has improved slightly compared to both three months and one year ago. The new rental regulations, announced last year and implemented in March, aim to provide greater security for tenants and increase housing supply. Key measures include a minimum six-year tenancy term for new leases, with rent increases capped at 2% annually during this period. After six years, landlords may raise rents to market rates. Large landlords with four or more tenancies are prohibited from conducting no-fault evictions on tenancies starting from March, while small landlords may only use no-fault evictions under limited circumstances, such as economic hardship or to accommodate family members. However, if a no-fault eviction occurs, rent resets are not permitted until the six-year term ends. The report’s author, Professor Ronan Lyons, cautioned that the increase in rental listings should be interpreted carefully. He suggested that some landlords delayed listing properties ahead of the new rules coming into effect, which may have temporarily suppressed supply. Regional rent increases were notable, with Galway city experiencing an 18% year-on-year rise, Cork 13%, Limerick 10%, and Waterford 8%. Dublin rents increased by 6.9% over the same period. While rental availability has improved to nearly 2,500 homes nationwide as of early May, this remains significantly below pre-pandemic levels when approximately 4,000 homes were typically available. Despite a 13% year-on-year increase in new rental listings since January, the rise only partially offsets previous declines in supply, highlighting ongoing challenges in the Irish rental market.