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Covid-19 pandemic reverses rise in rents and sees drop in new tenancies registered

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The cost of renting fell by 3.3pc in May when compared with the same month a year ago (stock photo)

The cost of renting fell by 3.3pc in May when compared with the same month a year ago (stock photo)

The cost of renting fell by 3.3pc in May when compared with the same month a year ago (stock photo)

THE pandemic has reversed the rise in rents.

And it has also led to a sharp fall off in the number of new tenancies registered.

Rents in Dublin fell in April, May and June, with drops in costs also recorded outside Dublin, according to the Residential Tenancies Board and the Economic and Social Research Institute.

The cost of renting fell by 3.3pc in May when compared with the same month a year ago, as public health restrictions were enacted.

Students returning to their parents and some foreign workers going home meant a fall in demand for accommodation. There is also some anecdotal evidence of properties that were being offered for short-term hire through the likes of Airbnb have been offered for rent instead, increasing supply.

On a monthly basis, the cost of renting fell in March, April and June, but not in May.

This is in contrast to a pre-Covid rises.

Rents rose 5.4pc in the first three months of the year when compared with the same quarter last year.

The rent index from the Residential Tenancies Board shows that the average rent across the country was €1,231 a month in the first quarter, a rise of €64 from what was being charged during the same quarter last year.

And Housing Minister Darragh O’Brien has now designated Bandon-Kinsale local electoral area as a rent pressure zone.

There are now a total of five local authorities and 48 local electoral areas which are designated as rent pressure zones. Some 73pc of private tenancies are locked in these zone, where rents cannot rise more than 4pc a year.

The Economic and Social Research Institute (ESRI) did a report for the Tenancies Board on the percentage changes only since the pandemic spread.

It found that the annual growth rate in rents was 3pc in March.

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But by April this had fallen to 0.4pc. This declined again in May to 0.1pc.

By June the annual growth rate had turned negative with prices falling by 3.3pc compared with the same month the previous year.

The ESRI warned that its estimates are based on small numbers of registered tenancies as it is covering the first half of the month.

The largest impact of the lockdown was experienced in Dublin.

Rental prices fell by 2.6pc in April, compared with the same period the previous year.

Outside Dublin rents rose by 3pc.

But they started to fall sharply in Dublin and outside of it in May and June.

Last month saw falls of 3.9pc in the cost of renting outside Dublin, and 1.8pc in Dublin, the ESRI study found.

The data also shows a big fall in the number of new tenancies registered with the Residential Tenancies Board between March and April.

In March there were over 7,000 registrations, but in April this had fallen to less than 4,000. The number also remained subdued in May, the board said.


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