Average tenant paying close to €1,000 despite slowdown in rent rises
The cost of renting a home has again shot up, but there are tentative signs that the rate of increase is easing off.
Experts said rent rises were slowing because landlords now realised that tenants couldn't afford to pay more for their accommodation.
New figures show the cost of renting across the State was up by almost 9pc in the three months to September.
It now costs close to €1,000 nationwide to rent the typical property, but the rate of increase is easing off, the rent index from the Residential Tenancies Board shows.
It costs €973 on average to rent a property nationwide. This is up from €897 in September last year.
Director of research at estate agency Savills John McCartney said rents had gone up by 40pc in Dublin since they fell during the downturn.
But people were now unable to bear higher rents, he added. "Rental growth in Dublin may be beginning to face a headwind from absolute limits on tenants' ability to pay," Dr McCartney said.
Some 704,000 occupants live in rented accommodation, according to the board, which is the State body that resolves disputes between tenants and landlords and advises the Government.
The rise in the cost of renting was 2.3pc in September. This was marginally lower than the 3.5pc increase recorded in the April-to-June period, prompting hopes that the runaway rises in rental costs could be slowing down.
Rents for houses are increasing at a slightly faster rate than rents for apartments, according to the data, which is compiled in conjunction with the Economic and Social Research Institute.
In Dublin, the pace of growth has slowed compared with earlier in the year, with rents increasing by 0.6pc. The slowdown appears to be driven by a marginal fall in house rents, while rents for apartments in the capital increased by 1.5pc over the same period.
Head of the Residential Tenancies Board Rosalind Carroll said this was the first quarterly decline in Dublin house rents since the start of 2013. However, the pace of rental cost growth outside Dublin has picked up, rising by 3.6pc in the third quarter.
Apartment rents were 9.9pc higher than in the same quarter of 2015, rising from €925 to €1,017.
Ms Carroll said the rate of growth in private sector rents appeared to be moderating.
But she warned that it would be prudent not to read too much into the results for any single quarter. "The market is still volatile and therefore it is difficult to identify patterns," she said.
Ms Carroll added that Dublin had seen much slower growth in the cost of renting property in the July-to-September period this year.
"But taking the third quarter 2016 data, based as it is on actual rents being paid, as opposed to asking rents, it does appear that the rate of growth has slowed, and in particular that the rate of rental growth in Dublin appears to have slowed," she said.
She noted that rents outside Dublin were rising more rapidly, but added that they were still 7.3pc behind the peak level of 2007.
Legislation limiting rent increases to every two years came into force last year. But critics say it has done little to take the heat out of the market.
A recent Daft.ie rental report found rents were at their highest level on record.
Ms Carroll said the board now had a total of 324,222 tenancies registered, representing 174,158 landlords and 705,183 occupants.