Average rents for residential properties rose by 5.6% nationally between April and June, according to the latest quarterly rental report from the website Daft.ie.
The report shows rents rising faster outside Dublin and a record low number of properties available for rent.
The Daft.ie rental report for the second quarter of this year shows the widest difference between how rents are moving across the country since the series began 15 years ago.
For example, rents in some parts of Dublin fell by 7%, while they rose in Kerry by 16.5%.
On average, Dublin rents are up 0.5% at just over €2,000 per month.
In Cork, the average was up just over 9% to €1,524.
Across the country, outside the cities, the average rent was €1,117 up 11.4%.
The most dramatic finding was the scarcity of supply.
On 1 August, there were 2,455 properties available for rent nationally, the lowest on record since the series began.
While the number of properties available in Dublin was actually higher than in 2019, there were just 789 properties available for rent in the rest of the country.
Speaking on RTE’s Morning Ireland, economist and author of the report, Professor Ronan Lyons, said the rent increases are largely as a result of the Covid-19 pandemic.
He said report shows increases that “off the charts” in a number of counties, where rents have risen between 13 and 18% year on year.
He said rents in Co Kerry have increased by 16.5% year on year, and 5% between March and June alone.
The report found there were just 800 homes to rent outside of Dublin on 1 August, compared to 1,800 houses two years ago – there were just eight houses to rent in Co Offaly and 15 in Co Waterford.
Prof Lyons said the growing population is part of the reason for the demand, along with a lack of new rental accommodation in the last 15 years and warned the lack of availability could make it difficult for students to access accommodation from September.
“Ireland’s rental sector has undergone a lost decade and half, with almost no new rental homes built. This cannot be solved by trying to regulate prices. It can only be solved by adding significant amounts of new supply,” he said.
He pointed out that the problem was now widespread, and not confined to Dublin.
“Policymakers – and citizens – should be wary of anything that limits the ability of foreign savers to build new rental homes here,” Prof Lyons added.
Responding to the report, the Institute of Professional Auctioneers & Valuers said it demonstrated the need to tackle the issue of supply and that would be done by building homes at affordable prices.
“Tinkering around the edges of the demand side, in controlling rents and making mortgages much more difficult to qualify for, have seen two private landlords leave the market for every one that has entered, and it has seen mortgages largely become the preserve of those on higher incomes or those fortunate enough to have family resources to support them,” Pat Davitt, IPAV Chief Executive said.
The Central Bank rules on mortgage lending – which limits the amount that can be borrowed according to income and the size of a deposit from the buyer – are currently being reviewed, but the regulator insists they will remain in place.
Mr Davitt said the government’s new housing plan – which is due to be published in the coming weeks – must include the entire planning process as well as the entire tax treatment of housing and investors in housing.
He repeated his call for the rental market to be reviewed in its entirety.
Additional reporting by Brian Finn