Dublin rents top €2,000 a month despite Government efforts as shortage deepens

Chronic supply shortages have been blamed for the ­latest spike. Rents rose by an average of 5.6pc in June, according to Daft.ie.

The average rent nationwide is now €1,500 a month, up 2.4pc on a year ago, and double what it was a decade ago.

A new record low has been hit for the number of properties for rent. The number is at an all-time low of 2,455 across the State. People moving out of the capital city is having a large impact.

Dublin rents were up by 1.4pc in the April to June period, the second quarter in a row that they have risen. But they are just 0.5pc above the level seen a year ago. The average rent is now €2,035. Other cities have seen much larger increases.

In Cork, Galway and Limerick cities, rents are between 9pc and 10pc higher than a year ago, while in Waterford they are nearly 12pc higher.

Outside the cities, rents rose by 8.6pc in Leinster, by 14pc in Munster and by 15pc in ­Connacht-Ulster, in the April to June period, when compared with the same quarter last year.

The rental cost surge comes as the Government grapples with the issue.

Housing Minister Darragh O'Brien has proposed limiting rent rises, while also designating more rent pressure zones.

Under the new proposals annual rent rises will be based on inflation rates instead of set caps. Current laws mean rents within rent pressure zones can only rise by a maximum of 4pc annually.

Under the new rules, which will run until 2024, there will be no cap on rent increases and instead rents will only be allowed to go up in line with general inflation, as recorded in the EU Harmonised Index of Consumer Prices (HICP).

But the proposals will not address the issue of what Daft.ie economist Ronan Lyons says is the "extraordinary tight ­supply" of homes to rent.

He said the 2,455 homes available to rent in August was the lowest point in the series going back to January, 2006. This compares with an average of almost 9,400 homes to rent at any one time over the past 15 years.

Dublin has seen a 44pc fall in the number of homes to rent in the past year. Outside the capital there were fewer than 800 homes available to rent.

Dr Lyons said that as the impact of Covid-19 on daily life begins to recede, the underlying issues facing the rental sector are re-emerging.

"It is a sector facing unprecedented shortages, with extraordinarily tight supply.

"Ireland's rental sector has undergone a lost decade and a half, with almost no new rental homes built."