Rents in new tenancies went up faster than in existing tenancies, according to new figures from the Residential Tenancies Board (RTB) for July to September last year.
National average rents for new tenancies were €1,598 per month, up 11% on the previous year, while existing tenancies rose 5.2% to a national average of €1,357.
Breaking down the average figures, there was a higher percentage increase in new tenancies outside Dublin, where monthly rent costs rose nearly 13% compared with 10% in the capital.
There were 14,000 new tenancies in the third quarter of last year. The cost to rent a three-bed house in Dublin was €2,362, while the same house cost €1,297 elsewhere.
Those in existing tenancies in a three-bed house paid a monthly average of €1,041 outside of Dublin, rising to €1,891 in the capital.
The figures from the RTB, independently analysed by the ESRI, are based on tenancy registrations and, since April 2022, tenancy renewals as landlords were obliged to re-register tenancies every year.
The RTB points out that compliance with Rent Pressure Zone rules that limit rent increases in existing tenancies is not measured in the Q3 Rent Index Report.
"The report provides robust insights into the private rental sector by tracking rental price developments in new and existing tenancies," Lucia Crimin, Deputy Director of the RTB said.
"Although rent levels are continuing to rise in both new and existing tenancies, standardised average rent levels in existing tenancies are lower than in new tenancies.
"The RTB is responsible for ensuring there is compliance by landlords with their legal obligations, including registering tenancies and setting rent amounts correctly."
Dr Rachel Slaymaker, Research Officer at the ESRI, has said the latest quarterly report on rents highlight the difficulties that new renters continue to face.
Speaking on RTÉ's Morning Ireland, she said it shows the disparity in rent "year-on-year" between people in new and ongoing tenancies.
Dr Slaymaker said the rise in new tenancy rents is "a very high figure historically".
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The Irish Property Owners' Association (IPOA) said it acknowledges the findings in today's report and the concerns raised but emphasised the need for an understanding of the "nuances" impacting the rental landscape.
"The surge in new rents can be attributed, in part, to tenants naturally transitioning, and leaving a property and new tenants taking up occupation," said Mary Conway, Chairperson of the IPOA.
"Properties rented for the first time are not subject to RPZ caps, contributing to higher average rents for new tenancies," she added.
The IPOA described the rise in property owners leaving the private rental market as "worrying".
"The association recognises the important role of the RTB in monitoring and enforcing rental regulations, however, overregulation and the impact this has in disincentivising property owners to stay in the market is clear from the almost 40% drop in new tenancies year-on-year," said Ms Conway.
"The IPOA encourages collaboration between property owners and regulatory bodies to ensure a fair and balanced rental market," she added.
'Enormous burdens'
Opposition TDs have demanded immediate action from the Government to tackle rising rents.
Sinn Féin Spokesperson for Housing Eoin Ó Broin accused the Government of not having "sufficient ambition" to deliver homes and called on a three-year ban on rent increases.
He told RTÉ's Drivetime: "The report is both utterly depressing but not surprising. It shows the Government’s housing strategy, also in respect to the private rental sector, is in tatters.
"We have rents rising to levels that are so high, they are placing enormous burdens on people."
"The central problem here is, Government simply doesn’t have a sufficient ambition or a track record of delivery of the very, very large volumes of both social and affordable rental and purchase homes.
However, Fine Gael Senator and Seanad Spokesperson on Housing John Cummins said that while Sinn Féin’s policies "may sound great in theory, it actually has a negative impact in terms of uncertainty for the market".
He added: "The Government position is we have a cap on rent increases of 2% that has given certainty to the market to continue to be able to build."
Mr Cummins said that high rents are due to shortage of supply.
He told the same programme: "High rents are a continuing symptom of a shortage of supply, but importantly we are increasing that supply - we saw 32,700 homes delivered last year.
"We’re now importantly starting to see a large volume of cost-rental units coming into the market, particularly in Dublin which I’d expect to see filtering through to the data later this year.
"Supply is very important and that’s why cost rental is so important, because it provides rents at at least 25% below comparative properties.
"I believe as we see more cost-rental homes coming into the market, that it will have a cooling impact on the wider market."
Mr O’Broin argued that the country is not seeing an adequate supply of cost-rental homes.
"Cost rental has been Fine Gael policy and they have funded it since 2019 - we didn’t see any units until 2021.
"If you actually look at their record, targets are exceptionally low, second they haven’t met cost-rental targets any year since it was introduced in 2019 - three years of a Fine Gael minister, no cost rental whatsoever, and since Darragh O’Brien became minister, virtually no cost rental."
