DUBLIN, Ireland: Ireland's rental market continued to tighten in 2024, with average rents rising by 5.7 percent over the year, according to a new report from property website Daft.ie.

The data highlights ongoing affordability challenges, particularly as rent pressure zones (RPZs) are set to expire at the end of this year.

In Dublin, the final quarter of 2024 saw a four percent increase in average rents compared to the previous year, reaching 2,481 euros per month. Outside the capital, rents rose by seven percent —the smallest gap between Dublin and the rest of the country in nearly two years.

The latest figures come amid growing debate over government rent control policies. The RPZ regulations, introduced in 2016 to curb excessive rent hikes, are due to expire on December 31. However, Taoiseach Micheal Martin recently suggested that the two percent cap could be removed, sparking concerns among tenants and opposition parties.

Sinn Féin, Labour, and People Before Profit have criticized the potential policy change, arguing that it could worsen the rental crisis. Tánaiste Simon Harris has stated that any reform must ensure "renters are going to be protected." The government is expected to decide on the future of RPZs based on recommendations from the Housing Commission, which has proposed a "rent reference" system.

The report underscores a persistent shortage of available rental properties, with fewer than 2,300 homes listed for rent across the country on February 1. This marks a 25 percent decline from the same date last year and is significantly below the 2015-2019 average of nearly 4,400.

In key cities, average monthly rents were recorded at 2,097 euros in Cork, 2,197 euros in Galway, and 2,271 euros in Limerick.

Report author Ronan Lyons, an associate professor in economics at Trinity College Dublin, warned that the lack of supply is a fundamental issue.

"A shortage of rental housing continues to plague the market, driving rents in the open market further up and creating a wedge between those that get the benefit from rent controls and those that don't," he said.

He added that while renters in controlled leases saw a modest seven percent increase in rents since 2021, those moving into new properties faced rent hikes of nearly 50 percent in the same period.

Lyons stressed the need for long-term policy solutions.

"Rising rents are a signal of a shortage of rental housing. The ultimate solution is to ensure new rental housing is built. This must be central to housing policy for the new Government," he said.