Laois had the highest rent increase in Ireland outside of Dublin

Laois recorded the highest annual increase in rent in Ireland outside of Dublin in the past year. 

That’s according to the latest Daft.ie Irish Rental Report for the second quarter of 2024. 

It compared average rental prices from the second quarter of 2024 with those from 12 months earlier. The results show Laois a 13.4 % increase in average rents. The highest of any country outside of Dublin and almost twice the average increase of 7.3%.

On Monday, August 26, there were ten properties available to rent in Laois on the Daft website. These ranged from a four bedroom house in Maryborough, Portlaoise for €2,300 per month to €1,300 a month for a four bedroom house in Silverglen, Mountmellick. 

The latest report said rental stock is down slightly across Leinster.  There were only just over 375 homes for rent in Leinster (outside Dublin) on August 1, 2024, down 4% on the same date a year ago and well below half the 2015- 2019 average of over 850.

Author of the Daft report, Associate Professor of Economy at Trinity College Dublin, Ronan Lyons said almost all of the new rental supply was confined to the capital, because of high construction costs. Between 2016 and 2019, there was an average of just over 2,500 rental homes available at any point in time, excluding Dublin.

“That total fell to below 1,000 during 2022 and 2023 and remains stuck there. As of the start of August 2024, there were fewer than 900 homes available to rent across the country, excluding Dublin. Across Cork, Galway, Limerick and Waterford cities combined, there were just 150 homes available to rent at the start of this month,” he said. 

“Where availability goes, affordability follows: supply is the single most important determinant of rental level. When supply is tight, rents are pulled up. We can see this in the path of rents in Dublin compared to the other cities over the last two years.

In the last two years, open-market rents in Dublin have increased by a total of 12%. In the other cities, they have increased by twice as much. This marks a continuation of a trend noticeable since the pandemic: rents in Dublin are up 26%, while rents in the other cities are up an average of 52%. 

Ideally, more than a decade into a rental housing shortage, we would be talking about the gradual spread of the solution, rather than a return to the core problem. The solution is new supply of market rental homes, in large volumes, in each and every rental market in the country,” said Prof Lyons. 

However, he said the policy environment has only actively promoted the construction of new market rental housing for roughly four years out of the last 12 ‐ and much of those four years, construction was hampered by lockdowns related to covid. Between 2018 and 2022, a combination of a favourable macroeconomic environment, the Strategic Housing Development (SHD) process and the Build to Rent (BTR) code meant that a significant pipeline of rental homes ‐ perhaps as many as 100,000 homes ‐ were proposed.

With a dramatic shift in the macroeconomic environment ‐ and in particular an increase in the yield required to keep investors in housing, as opposed to other assets ‐ what Ireland needed was an even stronger policy in relation to the construction of rental homes, said Prof Lyons. 

"Instead, both the SHD and the BTR were axed. My hunch is that they were axed because of the same issue that plagues housing and gives rise to supply-side scepticism: the long lead-in time between high prices and new supply having its effect.

Housing takes time to build, always and everywhere. Housing in Ireland takes longer than in most jurisdictions, because instead of choosing between a zoning system and a permissions system, we have both ‐ and more recently we have added the Courts system on top.

Apartment housing, the stock in trade of rental homes, takes longer than developments of houses. And of course with lockdowns, apartment housing in Ireland in recent years has taken even longer again," he said. 

Prof Lyons said it was "most unfortunate that pro-rental policies were scrapped just as the evidence was starting to emerge of their success. Reintroducing pro-rental policies is, however, not a discretionary policy option. It is an imperative choice if Ireland is to have some semblance of a healthy housing system by the end of the decade."