There is a “sign of hope” in Ireland’s rental sector, the Minister for Finance has claimed, despite figures showing the cost of rent has gone up over the last year.
Michael McGrath said that while there has been a “significant” increase in the annual figures, the last quarter of 2023 shows a reduction in rents for existing and new tenancies.
Sinn Féin has claimed the Government has “no plan for a private rent sector spiralling out of control”.
The new statistics show that the cost of rent has gone up by 5.9 per cent in existing tenancies and 9.1% for new renters in the last year.
There was also a 31 per cent drop in new tenancy registrations in the last three months of the year compared with the same period in 2022, according to the Q4 2023 Rent Index Report by the Residential Tenancies Board (RTB).
The figures for each geographic area in the report, which were independently analysed by the Economic and Social Research Institute (Esri), use a measure of “standardising” rents to account for changes in property types over time.
Nationally, new rents are now €16,488 a year and existing rents are €19,140.
This breaks down to average new rents in Dublin being €25,176 a year and existing rents at 21,660 euro per annum in the capital.
Outside Dublin, new rents now cost on average €15,360 and existing rents €12,612.
“I think it’s important to point out that when you look at the annual figures, then there is a significant rate of increase,” Mr McGrath said.
“But if you look at the most recent data, even in respect of new tenancies in the last quarter, we had a reduction in rents both nationally and in Dublin. That’s even for new tenancies.
“We need to see a number of quarters in terms of the data to see if there is a trend or if the wider trend over the last year of significant increases is going to continue.
“But there is certainly a sign of hope there in the last quarter, that even in respect of new tenancies both in Dublin and nationally, we saw a reduction in rent levels.
“I think fundamentally it does come down to supply, continuing to make progress in providing accommodation all over the country.
“We built almost 33,000 homes last year, we will certainly go beyond that this year. We made a very good start in quarter one in terms of commencement data.
“So there is real momentum when it comes to house building and that is in no small part because of the government becoming centrally involved in the housing market.”
Mr McGrath said he will also review the rent tax credit ahead of the next budget.
“Supporting renters is a priority for government,” he added.
Sinn Féin housing spokesman Eoin Ó Broin said rents “continue to spiral out of control” and “supply continues to contract”.
Mr O Broin said: “How are regular working people expected to afford these rents? How are they to save for a deposit to buy a home? Month on month, year on year, rents continue to rise for new and existing tenants, inside and outside rent pressure zones (RPZs).”
Rents in an RPZ cannot be increased by more than two per cent per annum pro rata or if it is lower, by the increase in the rate of inflation as recorded by the Harmonised Index of Consumer Prices (HICP).
With some exemptions, this restriction applies to new and existing tenancies in RPZs.
The RTB said the quarterly report is not to be interpreted as a measure of compliance with the RPZ rules.
However, Mr Ó Broin said “here is also mounting evidence of significant noncompliance” with the annual two per cent cap in RPZs.
“While the RTB report doesn’t address the scale of compliance it does give them the data to investigate and enforce.
“It is clear that the Government has no plan for a private rental sector spiralling out of control. Their renters tax credit is simply not enough. We need an emergency ban on rent increases for three years and a full month’s rent back in every private renter’s pocket.
“But, more importantly, we need the Government to dramatically increase investment in and delivery of genuinely affordable homes to rent and buy.
“Last year, just 100,000 affordable homes were delivered by the Government and many of these were too expensive for most working people.”
