Rents in Louth reach staggering new high

Average rents in Louth rose 9.7% up to the end of 2023, and standing at €1,701, are 167% higher than they were during the trough in the last recession, according to the Daft.ie Irish Rental Report Q4 2023, released today.

As of the morning of Friday 23 February, 36 properties were available to rent in Louth on the Daft.ie website, a county with a population of 139,703, according to the 2022 Census.

The latest rent report shows that the average monthly rent for a one-bed apartment in Louth rose by 9.3% in the year to the end of 2023, and now stand at €1,107. Comparing the final quarter (Q4) of 2023 to the third quarter (Q3), rents in Louth rose by 2.2%.

The average rent for a two bed house rose by 7.5% to €1,329, and the average rent for a three bed house rose by 11.2% to €1,575 a month.

Four bed houses in Louth saw an annual rise of 10.7%, standing at €1,801 at the end of 2023. The biggest annual rise in rent in Louth last year, were five bed houses, which rose by 20%, to stand at €2,058 at the end of Q4 2023.

Comparing rents in Louth to mortgage payment for the same property, it can be seen that it rent remains much higher than monthly mortgage repayments.

Using current mortgage repayments based off the following parameters: 3.5% interest rate, for a term of 25 years, with a 90% LTV, a figure is also given for the case where mortgage rates rise by two percentage points, the average mortgage and rent payments compared, in Louth at the end of 2023 are:

Nationally, market rents rose by an average of 6.8% during 2023. 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 covid19 in early 2020.

Economist at Trinity College Dublin & author of The Daft.ie Report, Ronan Lyons said that: "Across the country, rental inflation halved in 2023 compared to 2022. That is the good news from the latest Daft.ie Rental Report, covering the final quarter of 2023 and reviewing the year as a whole.

"Unsurprisingly, that good news is tempered by further context: the overall rate of inflation remains far higher than the levels one would expect to see in a healthy rental market. Open-market rents rose by 6.8% on average across the country in 2023, compared to a near-record 13.7% in 2022.

"Added to the 10.3% increase seen in 2021, this means that rents in the open market are now, on average, 36% higher than they were at the outbreak of covid19."

According to the report rent inflation in Dublin has fallen compared to the rest of the country. Mr Lyons contributes this to increased supply in Dublin. He explained:

"In 2017 and 2018, about 4,400 apartments were built in the country, the vast majority in Dublin and the vast majority of those for rental. This rate, of roughly 33 per week in Dublin, has increased substantially in the last five years – covid lockdowns notwithstanding.

"In 2022, an average of 133 apartments were built per week in Dublin, while in 2023, that rate increased further to 175 per week. Only a small fraction of those apartments were for owneroccupiers – an issue for another day – while a larger fraction were for social rental.

"But the majority have been new apartments available on the open market. This surge of 20,000 new apartments between 2021 and 2023 in the capital – more than three times the number of apartments built in the entire rest of the country in the same period – is what explains the slowdown in rental inflation in Dublin.

"These are the delayed fruits of the confluence of favourable factors in the late 2010s that brought lots of capital into Dublin to build new rentals. Those factors included the external macroeconomic environment, the ‘Strategic Housing Development’ initiative and the ‘Build to Rent’ planning code – as well as, of course, the need for new rental accommodation.

"The need for new accommodation remains – and outside Dublin hasn’t been addressed at all. But all of the other factors are gone. Unless policy actions are taken to change course, over the next few years, the number of new rental homes built in Dublin will fall again, while it will remain close to zero elsewhere in the country.

"2023 shows what new rental supply can do to address rental market challenges. It remains to be seen whether that lesson will be learned."