The average cost of renting a home is at the highest level on record and climbing faster than at any point since Daft.ie started tracking figures in 2002, a report published this morning has found.

According to the property website’s quarterly report, rents went up 13.5 per cent in the 12 months to the end of December, taking the average monthly rent across the State to €1,111.

In Dublin, the annual rate of rental inflation is 14.5 per cent, the second-highest rate of increase on record since Daft.ie first started publishing tracking data in 2002.

The cost of renting in the capital is 13.7 per cent higher than it was at the previous peak in early 2008, or an average of almost €200 a month more. Anyone looking to rent in the centre of Dublin can expect to pay €1,655, an increase of 15.5 per cent year-on-year.

Supply shortages

In Cork, rents rose by 12 per cent and 10 per cent in Galway. The cost of renting in Limerick was 12.5 per cent higher while in Waterford rents climbed by 10.7 per cent, the same rate of increase recorded outside major urban centres.

Supply shortages are driving prices higher and there were fewer than 4,000 properties available to rent on February 1st, slightly up on last year but just a quarter of the available properties five years ago.

“The latest figures from the rental market remain very concerning,” said economist and report author Ronan Lyons.

He pointed out that measures introduced by Government to control rental inflation may help sitting tenants but do little to address the underlying issue of a lack of supply. “Indeed, they may hinder supply, by encouraging the exit of existing landlords who had not substantially increased rents in recent years,” he said.

He stressed the need for the cost of construction to be addressed and suggested it was the “best way of dealing with supply issues”.

Extremely worrying

The Simon Community’s spokeswoman Niamh Randall described the new figures as “extremely worrying” and said “spiralling rents and dwindling supply” were contributing to the problem of homelessness.

Keeping people in the homes that they already have is key to stopping the flow of people into homelessness, she said.

Chairman of the Irish Property Owners’ Association Stephen Faughnan also said the report made for “worrying reading for the Government and their much lauded Housing Action Plan”.

He said that with a “dwindling supply of accommodation and homelessness increasing, what is the Government actually doing other than producing fancy plans which may look good on paper but which realistically, will not solve the problems for the current generation of renters?”