Cost of monthly rent has soared by nearly €500 since Covid first struck

Last year, the cost of new tenancies rose by 6.8pc. Even though that rate of increase is half the rental inflation figure for 2022, it still means the monthly cost has shot up in the last few years.

The average open-market rent nationwide in the final quarter of last year was €1,850 a month, according to the latest Daft.ie rental report.

This compares with €1,365 a month at the outbreak of Covid in early 2020.

The slight easing back in the rate of increase in rental inflation has been driven by Dublin, where average rents are now €2,384 a month.

New rental agreement asking prices rose by just 2.6pc in Dublin last year, compared with an average increase outside the capital of 10.6pc, Daft.ie said.

Rents in Cork and Waterford cities rose by between 7pc and 8pc during the year.

Galway city experienced an 11.3pc surge in the cost of new rental tenancies, with Limerick city recording a 14pc increase.

Outside the cities, the smallest annual increase was in Dublin’s commuter counties, at 7.5pc.

The largest increase was in Cavan, Donegal and Monaghan, where market rents were nearly 17pc higher than a year earlier.

Nationally, the number of homes available to rent increased by 937 between October 2022 and last December, Daft.ie said.

Of that increase, 80pc was seen in the Dublin area, while almost all the rest was in surrounding areas. At the start of this month there were just over 2,200 homes available to rent nationwide.

This is up 6pc on the same date a year earlier and the 11th month in a row of year-on-year gains in availability.

Ronan Lyons, author of the report and associate professor of economics at Trinity College Dublin, said the need for new accommodation remained.

He said there was no supply coming on board out of Dublin.

Unless policy actions were taken to change course over the next few years, the number of new rental homes built in Dublin would fall again, while it remained close to zero elsewhere in the country, he said.

“The construction of significant amounts of new homes to rent in Dublin over the last two years is reflected in the near-disappearance of inflation in market rents in the capital.

“This is a welcome reminder that the basic economics of supply and demand work in rental markets and thus that new supply is the answer to strong rental demand,” Prof Lyons said.

However, there had been almost no new rental accommodation built outside Dublin, where acute rental shortage also exists, he said.

The pipeline of rental projects in Dublin was likely to slow in 2024 and beyond.

Prof Lyons said that with significant viability challenges, it remained incumbent on policymakers to deliver a healthy rental market around the country.

A new rental in Cork city now costs €1,907 a month, up 7.9pc in the past year.

In Galway city, the average new rental deal is €1,999 a month, up 11.3pc in a year.

Average monthly rents in Limerick city are now €1,907, up 14pc.

Waterford city has an average new rental cost of €1,537, up 7.4pc, while in the rest of the country the average monthly cost is €1,489, up 11pc.