Rents in Kilkenny rising faster than rest of South-East, with low availability of housing - Daft report

Market rents were on average 13.8% higher in the final three months of 2023 than a year previously in Kilkenny, the latest Daft.ie report shows.

The increase is greater than in neighbouring South-East counties such as Waterford, Carlow, Tipperary and Wexford. The average listed rent here is now €1,467, up 46% from the level prevailing when the pandemic occurred.

Market rents in Leinster's South-East counties rose 10.9% year-on-year, compared to a 15.8% increase seen during 2022. The on-going increases in rents reflect very low availability, with fewer than 90 homes available to rent on February 1, up slightly on a year ago but well below the 2015-2019 average of more than 210.

Nationally, market rents rose by an average of 6.8% during 2023, according to the latest Rental Report by Daft.ie. This compares with an increase of 13.7% seen during 2022 and 10.3% in 2021. The average open-market rent nationwide in the final quarter was €1,850 per month, compared to €1,365 per month seen at the outbreak of Covid-19 in early 2020.

The decline in rental inflation is driven by Dublin, where rents in the open market rose by just 2.6% during 2023, compared to an average increase outside the capital of 10.6%.

Rents in Cork and Waterford cities rose by between 7% and 8% during the year, while those in Galway and Limerick cities rose by 11.3% and 14% respectively. Outside the cities, the smallest annual increase was seen in Dublin’s commuter counties (7.5%) while the largest increase was seen in the three Ulster counties, where market rents were almost 17% higher than a year earlier.

The different trends in rent are matched by differences in changes in the availability of rental accommodation. Nationally, the number of homes available to rent increased by 937 between October 2022 and December 2023.

Of that increase, 80% was seen in the Dublin area, while almost all the rest was seen in surrounding areas. On February 1, there were just over 2,200 homes available to rent nationwide, up 6% on the same date a year earlier and the 11th month in a row of year-on-year gains in availability.

“The construction of significant amounts of new homes to rent in Dublin over the last two years is reflected in the near-disappearance of inflation in market rents in the capital," said Ronan Lyons, Associate Professor in Economics at Trinity College Dublin and author of the Daft.ie Report.

"This is a welcome reminder that the basic economics of supply and demand work in rental markets and thus that new supply is the answer to strong rental demand. However, there has been almost no new rental accommodation built outside Dublin, where acute rental shortage also exist.

"Further, the pipeline of rental projects in Dublin is likely to slow in 2024 and beyond. With significant viability challenges, it remains incumbent on policymakers to deliver a healthy rental market around the country.”