The Minister for Housing, Planning and Local Government welcomed the Residential Tenancies Board’s Rent Index Report for Q1 2018 which was published today (12 June) and is produced in conjunction with the Economic and Social Research Institute and is based on the actual rents being paid in over 19,879 tenancies registered with the RTB during the quarter.
Commenting, Minister Murphy said:
What we are seeing here is a clear slow-down in the rate of rent inflation – with the slowest national growth rate in a year at just 0.4% rent inflation.
Particularly in Dublin, where rental pressures are most severe, we’ve seen a significant slowing down in rent increases. Rents only increased by 1% in Dublin in the first quarter of the year – the increase in the last quarter of last year was similar at 1.1%. Perhaps more significantly, we saw a drop in average rents (-0.8%) in counties surrounding Dublin: in Kildare, Meath and Wicklow in the first three months of the year.
So, in practical terms, the average rent for a house in Dublin rose by about €1 in the past three months, while the average rent for an apartment in Dublin rose by about €18. Rents are still too high in many parts of the country. But this data shows us that the Rent Pressure Zones are working and having a dampening effect on rent inflation. They do need to be better enforced and we have more work to do to reform our rental market and bring about more transparency, accountability, and affordability – that will be a central focus of my work over the coming weeks as I bring new legislation in to the Dáil.
The Rent Index Report for Q1 2018 shows that nationally, quarter on quarter rent inflation growth continues to slow, with national average rents rising by just 0.4% in Q1 2018, the slowest growth rate since Q1 2017. Rents in Dublin also slowed to 1% over the first three months of the year, while rents in the 3 Mid-East counties in the Greater Dublin Area (Kildare, Meath and Wicklow) fell by 0.8% over the same period.
While average national rents grew by 7.1% in the twelve months to end-Q1 2018, a slight increase on the previous quarter’s year-on-year increase of 6.4%, part of this increase in the annualised rate for Q1 2018 can be attributed to the fall in rents in Q1 2017, following the introduction of the first Rent Pressure Zone designation in late December 2016. The year-on-year average rent increase in Dublin (up from 5.1% to 7.8% this quarter) has similarly been impacted by a 1.5% fall in rents recorded in Q1 2017.
The standardised national average rent for new tenancies was €1,060 per month, up from €990 one year earlier and up a modest €4 relative to Q4 2017. Indeed, when looking at rent trends for houses nationally, the average rent for a house has risen by €5 in the last three quarters (€1,055 Q3; €1,058 Q4; €1,060 Q1). The quarter-on-quarter growth rate for apartments fell by 1% to stand at 0.7%. This is the lowest rate of apartment price inflation for 12 months.
It is worth noting that in Q4 2017, the increase in rental inflation in the GDA (excluding Dublin) outpaced rental growth in Dublin city, suggesting the rent price pressures in the city were spilling over into the surrounding commuter counties. However, in this latest quarter, the trends have reversed with a quarterly slowdown evident in the GDA (excluding Dublin) and only a slight increase in Dublin.