Eoin Meegan
With soaring rents in recent years in the capital, it appears good news is at last on the horizon. The Residential Tenancies Board (RTB) has published a report ‘Exploring the Impact of the COVID-19 Pandemic on Rental Prices in Ireland from January to June 2020: Early Insights from a Monthly Rent Index’, carried out by the Econnomic and Social Research Institute (ESRI), that examines the short-term impact of the COVID-19 pandemic on private rental prices in Ireland.
The findings show that the annual growth rate of rent amounts declined significantly compared to the period prior to the lockdown. While the annual growth rate in March was over 3%, by April this had fallen to 0.4%, and it declined again in May to 0.1%. By June, the annual growth rate had turned negative with prices falling by 3.3% compared to the same month the previous year.
In addition, between March and April there was a significant decline in the number of tenancies registered with the RTB. While in March there were over 7,000 registrations, in April this had fallen to less than 4,000. The number also remained subdued in May.
Commenting on the report’s findings, Padraig McGoldrick, Interim Director of the RTB said: “A core function and strategic priority of the RTB is the provision of accurate, relevant and authoritative research. Every quarter, the RTB publishes the most accurate and authoritative rent report of its kind on the private rental sector in Ireland.
Today, we are launching the Q1 2020 Rent Index Report. The latest Index Report would under normal circumstances be signalling continuing signs of price moderation with the national standardised average rent up by 5.4% from Q1 2019.
However, the Q1 2020 Index can only really provide us with a pre-pandemic benchmark. “That is why, as part of the Rent Index series, we asked the ESRI to produce a short run index covering the period from January to June 2020. This work has allowed us a real-time view of developments in the private rental sector, so we can begin to understand the pandemic’s impact.
It’s clear from the analysis since the pandemic began that the rental market has been immediately impacted by lockdown, with prices falling by 3.3% nationally in June compared to the same period the previous year.
Dublin experienced the most immediate reduction, however, as we went further into lockdown, we saw price growth outside of Dublin gradually begin to decline at a greater level. We understand that the COVID-19 crisis presents new challenges for both landlords and tenants across the country.
“We are continuing to encourage those who are experiencing issues in their tenancies during this time to visit our website [www.rtb.ie] for information on how to resolve issues and, if necessary, use the RTB’s telephone mediation service, which is a free service to help landlords and tenants resolve a dispute in a mutually beneficial manner, and does not require people to leave their home.”
This estimated index uses the same data structure and modelling strategy as per the quarterly Rent Index, which is documented in the Rent Index publication series. The index is estimated on real-time data up until 16th June. It is therefore subject to potential data revisions as many landlords may not have registered tenancies for the later months in the sample.
Conor O’Toole, Senior Research Officer at the Economic and Social Research Institute, said: “The spread of COVID-19 and the resulting lockdown is likely to impact all facets of the Irish economy. This includes prices in the rental market, which have been rising rapidly in recent years due to excess demand and strong economic growth.
“To ensure the analysis covered by the Rent Index series was as up-to-date as possible, given the pandemic, we drew on real-time data from the RTB to estimate a monthly rent index, giving us data for the January to June 2020 period. This allows us to provide an early view into the impact of the pandemic on rental prices and tenancy registrations in Ireland.
“This report provides a clear insight at the present juncture. With the economic situation relating to the pandemic rapidly evolving, it is difficult to assess the trajectory of prices in the short to medium term. However, it is very likely they will closely mirror developments in incomes and unemployment of households. A more detailed granular assessment of trends in pricing will be presented in the upcoming Q2 Rent Index which will be published later in the year.”
The RTB has also published the quarterly Rent Index for the January-March period (Q1) of 2020. In Q1 2020, the national standardised average rent was €1,231 per month, up by 5.4% (€64) from Q1 2019, and quarter-on-quarter rents increased nationally by 0.8% (€10) from Q4 2019.
Following referral from the Housing Agency and the Minister for Housing, Local Government and Heritage, Darragh O’Brien T.D., the RTB, using the Q1 2020 Rent Index, has confirmed to Minister O’Brien that one Local Electoral Area (LEA) Bandon-Kinsale LEA, has met the Rent Pressure Zone (RPZ) designation criteria. As a result, this LEA is designated an RPZ as of today, Thursday 16 July 2020.
The RTB Rent Index, which is compiled in conjunction with the ESRI, is the authoritative report on the Irish rental market. It is based on actual rents paid on 20,878 tenancies registered with the RTB in the quarter, which is made up of housing stock new to the rental sector, new tenancies in existing housing stock and renewals of existing tenancies.
