The RTB/ESRI Q4 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 19,287 private tenancies registered with the RTB in Q4 2020, made up of homes new to the rental sector, new tenancies in existing housing stock and renewals of existing tenancies.
Since the onset of the Covid-19 pandemic, the introduction and easing of restrictions around rental price growth in line with public health measures is likely to have had an effect on trends throughout 2020.
In Q4 2020, 82.8 per cent of registered tenancies were new registrations with 17.2 per cent being renewals. Dublin and the Greater Dublin Area excluding Dublin (GDA) account for over half of all tenancy agreements, 53.1 per cent, with 46.9 per cent of tenancies relating to the Rest of the Country. Since 2013 the gap between the number of new and renewal tenancies has generally been narrowing, as renters appear more likely to remain in their existing accommodation.
As of Q4 2020, rents in Dublin were substantially higher than those outside Dublin at €1,745 per month as compared to €955 per month. The standardised average rent in the GDA excluding Dublin stood at €1,307, while it was €904 outside the GDA as of Q4 2020.
The national standardised average rent stood at €1,256 in Q4 2020, equal to its level in the previous quarter. On an annualised basis, rents grew by 2.7 per cent in the fourth quarter of 2020. This growth rate is higher than that of the previous quarter. Q4 2020 showed a decline in the number of tenancies registered with the RTB compared to the previous quarter.
The contrast between Dublin and the Rest of the Country in Q4 2020 is very clear, with 60.8 per cent of rents over €1,500 in the capital, and another 30.0 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 56.0 per cent while only 7.5 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 Q4 2020, only about 9.2 per cent of rental contracts were agreed at €1,000 or less. This is a low proportion when compared to the equivalent figure of 64.1 per cent outside of Dublin.
The standardised average rent for houses stood at €1,219 per month in Q4 2020, a marginal rise of 0.6 per cent on the previous quarter and a rise of 3.0 per cent year-on-year. The standardised average rent for apartments stood at €1,306 per month in Q4 2020, a decrease of 0.6 per cent on the previous quarter but a rise of 2.1 per cent year-on-year.
The economic context determines the drivers of rental inflation in Ireland. For now, economic developments remain tied completely to Covid-19. The period Q4 2020 was a quarter in which the Irish economy experienced a lockdown followed by a reopening, followed by further public health restrictions introduced in late December and January. Recent research has indicated that households in the private rental sector suffered a greater economic hit relative to other tenures during the March to June lockdown due to a higher concentration of employment in sectors most severely impacted by the pandemic. Longer restrictions will therefore likely have a disproportionate impact on households in the rental sector.