Rents have fallen in Dublin, presenting the first concrete evidence that it was worst affected nationwide by the impact of Covid-19.
The latest Daft.ie report revealed rents fell 3.3pc in one year in Dublin, while outside of Dublin rents rose 5.4pc.
Ronan Lyons, Assistant Professor in Economics at Trinity College said there are two ways of interpreting falls in rents.
"The first is a fall in demand as would be expected with a big increase in unemployment,” he said. “The second is an increase in supply, as might happen where significant numbers of short term lettings move over to the long term rental market.”
He said the latest report, which covers the market nationwide to January 2021, presents the first concrete evidence of an idea suggested since early in the Covid-19 pandemic: “Of all rental markets in the country, Dublin would be most badly affected by the collapse in everyday activity.”
The report looked at 54 rental markets.
Dublin rents fell 3.3pc during 2020, with declines concentrated in the second and fourth quarters of the year. In the rest of the country, however, rents increased 5.4pc on average, with only a modest fall in the second quarter lockdown and an increase during the final three months of the year.
In Limerick city, rents were almost 4pc higher year-on-year, while in Cork and Galway cities, the increase was just under 5pc. In Waterford city, rents climbed 5.6pc.
The report noted that the different trends in rents reflect changes in availability. In Dublin, there were 2,600 homes available to rent on February 1, up from fewer than 1,600 on the same date in 2020.
In the rest of the country however, the number of homes available has fallen sharply, from almost 2000 on February 1, 2020 to just 1,139 a year later.
Mr Lyon said: “Outside Dublin, Covid-19 has led to a further worsening of supply conditions in the rental market with the number of homes coming on each month down 17pc on already low levels.
"While demand for rental homes outside the capital has fallen – with the rise in unemployment – it has not fallen as much as supply, pushing rents further upwards.”
He said that in the capital, Covid-19 has had the opposite effect, with the number of homes being advertised to rent up 64pc on February 1, compared to a year previously. With the increase in homes being advertised, active demand for rented homes has also soared, up 40pc compared to pre-pandemic.
"But the greater liquidity of the market has helped bring rents down slightly. Nevertheless, rents in the capital and in Ireland’s other main cities remain at twice their level a decade ago,” he said.
The average rent in Dublin in the fourth quarter of last year was €1,924, down 3.3pc year on year. In Cork city, it was €1,452, up 4.8pc year on year. In Galway city, it was €1,379, up 4.6pc; in Limerick city it was €1,265, up 3.9pc; in Waterford city it was €1,067, up 5.6pc; and in the rest of the country, the average rent was €1,048, up 5.6pc.
The average national monthly rent in the final quarter was €1,414, up from a low of €742 per month seen in late 2011.
In Dublin 1, 4 and 6, rents in the final three months of 2020 were 6pc lower than a year previously.