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The amount of homes available for rent across the state has increased by almost 40 percent as a result of the coronavirus crisis, according to the property website Daft.ie.
This sharp increase in supply came when average incomes in April fell 2.1 percent compared to March, due to the economic consequences of the pandemic.
The increase in available properties is said to have been caused by homeowners who withdrew their rentals from short-term listing sites like Airbnb and offered them on Daft.ie.
In its latest quarterly report on the rental market here, Daft said there were 3,800 properties available to rent on its website on May 1, nearly 40 percent more than the 2,700 properties listed on the same day last year.
While rents fell monthly, they increased 3.8 percent in the first quarter year-over-year, although this marked the lowest inflation rate recorded since late 2012.
Average income
The national average monthly rent was € 1,418 in the first quarter of 2020, € 676 more than the minimum seen at the end of 2011.
Trends in the early 2020s have been very similar across the country, with rents rising nearly 4 percent in many parts of the country in the year through March before falling to 2 percent in April.
In Dublin, rents fell 2.5 percent in April compared to March, while in the other four major cities they fell an average of 2 percent.
Commenting on the report, Ronan Lyons, an economist at Trinity College Dublin and author of the Daft report, said: “Before Covid-19 halted the economy, things seemed to be finally starting to improve for Ireland’s rental sector.
“After a decade where no new rental housing was actually built, the situation had improved in recent quarters. The figures in this report show that more than 35,000 new rental homes were in process, when Covid-19 closed the construction sector, “he said.
“Given that the pandemic is unlikely to change any of the long-term fundamentals driving underlying housing need, there is a danger that while its immediate impact could be to cut rents, its longer-term effect could worsen shortage”.
Pat Davitt, executive director of the Institute of Professional Auctioneers & Valuers, said the demand and supply curve for residential rentals was “completely changing, particularly in high-demand urban areas.”
“The Covid-10 pandemic has coincided with a plan by local authorities to implement regulations that went into effect on July 1 to abolish short-term tourist rentals to make properties available for the needs of the domestic market,” said.
“The effect of the pandemic has indeed been to do this work for local authorities and to do it almost overnight, when the tourism market has run out.”
Davitt said the downward pressure on rents is likely to continue. “Factors such as employment levels and any new job patterns that emerge will also play an important role in the supply / demand curve for the foreseeable future.”
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