New Heights Reached In Louth Rental Market
Louth Rental Market Surges
The latest Daft.ie Irish Rental Report Q4 2023 reveals a remarkable upsurge in rental prices across Louth, reaching unprecedented levels. Average rents have soared by 167% from the depths of the previous recession, now standing at €1,701 by the end of 2023, marking a 9.7% increase from the previous year.
As of February 23, a total of 36 properties were listed for rent on Daft.ie in Louth, a county with a population of 139,703 according to the 2022 Census.
Breaking down the numbers, the report indicates a 9.3% annual increase in the average monthly rent for one-bedroom apartments, now averaging at €1,107. Comparing the last quarter of 2023 to the preceding quarter, rents experienced a 2.2% rise.
Two-bedroom houses saw a 7.5% rise, reaching €1,329, while three-bedroom houses experienced an 11.2% surge, reaching €1,575 per month. Notably, four-bedroom houses witnessed a 10.7% increase, totaling €1,801, whereas five-bedroom houses experienced the most significant annual rise of 20%, reaching €2,058 by the end of Q4 2023.
In comparison to mortgage payments for equivalent properties, rents in Louth significantly outweigh monthly mortgage repayments. Based on a 3.5% interest rate for a 25-year term with a 90% Loan-to-Value ratio, the disparity becomes apparent. Even with a potential 2% increase in mortgage rates, rent payments remain substantially higher:
| Property Type | Mortgage | Mortgage +2% | Rent |
|---|---|---|---|
| One bed apartment | €450 | €565 | €1,107 |
| Two bed house | €657 | €825 | €1,329 |
| Three bed house | €933 | €1,172 | €1,575 |
| Four bed house | €1,747 | €2,194 | €1,801 |
| Five bed house | €1,868 | €2,346 | €2,058 |
Nationally, market rents increased by an average of 6.8% throughout 2023, a notable slowdown compared to the previous year’s 13.7% surge. However, the average open-market rent across the country reached €1,850 per month by the final quarter, compared to €1,365 per month at the onset of the COVID-19 pandemic in early 2020.
Economist Ronan Lyons, the author of The Daft.ie Report and a professor at Trinity College Dublin, observed a halving of rental inflation nationwide in 2023 compared to 2022. While this presents positive news, the continued high inflation levels signal an unhealthy rental market.
Lyons attributes the decreased rental inflation in Dublin to increased housing supply in the city, highlighting a substantial rise in apartment constructions in recent years. However, he warns of potential future challenges in maintaining rental supply outside Dublin unless policy interventions are implemented to stimulate construction in other regions.
