The RTB/ESRI Q1 2021 Report produced by the Residential Tenancies Board and the Economic and Social Research Institute tracks price developments in the Irish rented housing market. The current Report is based on rents paid on 15,899 private tenancies registered with the RTB in Q1 2021 compared to the 16,235 tenancies registered in Q4 2020.
The decline in the number of tenancies registered with the RTB in this quarter is most likely linked to the increased Covid-19 restrictions in place during the first quarter of 2021. There were a higher number of tenancies registered in Q3 and Q4 of 2020 and a lower number of registrations in the first two quarters of 2020 compared to the same period in 2019. Renewal tenancies were not included in the sample used to generate Q1 2021 Report; tenancies that commenced before 24th December 2016, landlords were required to register a tenancy as a Part IV Renewal after 4 years. For tenancies that commenced after 24th December 2016 landlords are required to register the tenancy as a Part IV Renewal after 6 years. This change means that no Part IV Renewals will be registered until Q1 2023.
Dublin and the Greater Dublin Area (GDA) accounted for 55.8 per cent of all tenancy agreements registered. In terms of property type, 60.4 per cent of the tenancies were for apartments. In Dublin, 77.2 per cent of tenancies were for apartments while it was 43.8 per cent and 50.6 per cent in the rest of the country and the GDA respectively.
On a quarterly basis, rents rose in all except 5 counties in Q1 2021, with 17 counties recording annual growth of more than 5 per cent in the first quarter of 2021. The highest standardised average rent was in Dublin at €1,820 per month while the lowest monthly rent was in Leitrim where the standardised average stood at €596 per month.
The national standardised average rent stood at €1,320 in Q1 2021 – an increase of just under €33 compared to Q4 2020. On an annualised basis, rents grew by 4.5 per cent in the first quarter of 2021. This growth rate is higher than that of the previous quarter (3.3 per cent) and the highest since the 4.7 per cent annual growth recorded in Q1 2020.
The standardised average rent for houses was €1,304 per month in Q1 2021, a rise of 2.6 per cent on Q4 2020 and a rise of 7.0 per cent year-on-year. The standardised rent for different housing types varied between €1,121 per month for a one-bed house to €1,442 for a house with four or more bedrooms; inflationary pressures continue to be greatest (year-on-year) for houses with four or more bedrooms.
The standardised average rent for apartments stood at €1,351 per month in Q1 2021, an increase of 2.3 per cent on Q4 2020 and a rise of 2.2 per cent year-on-year. The standardised rent for different apartment types varied between €1,207 per month for a one-bed apartment, €1,374 for a two-bed apartment, and €1,574 for an apartment with three or more bedrooms. The year-on-year increase for two-bed apartments was 2.7 per cent while apartments with three or more bedrooms had the highest year-on-year growth at 4.9 per cent.
The economic context determines the drivers of rental inflation in Ireland. Having grown at 4.7 per cent per annum in Q1 2020, the national rate of inflation dropped to 1.6 per cent in the second quarter of 2020 as the Irish economy and society experienced various levels of restrictions. In Q3 and Q4 of 2020, the annual inflation rate increased to 2.5 and 3.3 per cent remaining below the pre-pandemic level of inflation. The 4.5 per cent annual growth rate Q1 2021, similar to the rate recorded in late 2019, suggests a return to pre-pandemic levels of rental price inflation.
Dublin has seen a greater initial drop and slower rebound in rental price growth since the onset of the Covid-19 pandemic than elsewhere. This reflects the impact of Covid-19 on both the demand and supply sides of the market in the short term.