A new daft.ie rental report released this morning shows the Dublin rental market suffered most from both the supply and demand effects of the pandemic last year, with rents falling by 3.3% for the year.
In contrast, rents rose by 5.4% on average outside the capital. Dublin experienced a large increase in the supply of properties for rent (from 1,600 to 2,600), whereas supply fell sharply in the rest of the country (from 2,000 to 1,100) over the past twelve months. A shift of short-term rental properties into the long-term rental market is partly to blame for the large increase in available rental properties last year.
This is further supported by the geographical pattern of rental declines in the capital. The biggest decline in rents in Dublin was close to the city centre, where rents fell by up to 7%. Goodbody Stockbrokers say demand has also clearly been curtailed by the migration out of the city due to an inability to work in city centre offices, they believe this is a factor that will also remain for much of 2021.
According to Goodbody Stockbrokers, "While the percentage increase in available properties for rent in Dublin is large, the stock available remains low. As a comparison, the stock of available properties for rent nationally rose to 27,000 in 2008, but currently stands at c.4000. In Dublin, the stock of available properties to rent rose to c.8,000 during the GFC, three times the current level. While there are clearly short-term issues with certain markets, the low level of stock overall is likely to put a lid on the extent of rental declines in the city, while shortages continue to push rents up elsewhere."