The rental market demand in Galway is growing considerably as families, students and couples are looking to move into the city. Galway is a cultural hotspot and with two universities, it has become challenging to find both affordable and available properties to rent.
Kyle O’Brien of DNG Maxwell Heaslip & Leonard comments, "Galway's rental market is experiencing significant growth, with average rents projected to reach €1,800 per month in 2025, reflecting a 7.7 per cent annual increase as of early 2024. This surge is driven by robust demand, influenced by the city's thriving economy, two universities, and vibrant cultural scene. However, limited housing supply has led to higher prices and reduced availability. The expiration of 'Rent Pressure Zone' regulations in December 2025 may further impact rent controls."
Rent Pressure Zones (RPZ ) are designated areas where rent increases are capped. This means that those paying rent in a RPZ cannot be increased by more than two per cent per annum pro rata. RPZs are located in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding affordable accommodation. They are intended to moderate the rise in rents in these areas and create a stable and sustainable rental market in Galway. In reality, they have added to the issue of rental shortage as many landlords are selling out.
The Government has since extended RPZs until December 31, 2025. On this, Galway's auctioneers had reasons to believe the expiration of RPZs will impact the 2025 rental market.
Olivia Lynch of Lynch Auctioneers, said: "The rental market in Galway is expected to remain highly competitive in 2025, with continued demand exceeding supply. I would imagine rents will stay high in our competitive market but the rate of increase may slow slightly, depending on government interventions towards the end of 2025, when the current rent controls is due to expire."
Colm O'Donnellan, Managing Director of O'Donnellan & Joyce Auctioneers agreed with this sentiment, saying: "There is a huge shortage in rental accommodation which is causing a lot of hardship for tenants. The government have to look at the rent pressure zones, which is one of the issues which has created the shortage, with landlords selling out."
Martin O'Connor of DNG Martin O'Connor, commented: "Regrettably it is going to be difficult in terms of supply. Over the past two years a lot of individual landlords are selling up and the pool of available letting properties is getting smaller. Demand is outstripping supply."
Deirdre D'Arcy of Rooney Auctioneers Galway & Limerick, concluded: "With continued limited availability of supply of rental properties, prices are likely to remain high, particularly in urban city's where demand is most acute. Regulatory changes and government interventions could influence the market, but without a substantial increase in supply, affordability challenges for renters are likely to persist in 2025."
