Irish Property Market chat II - read mod note post #1 before posting

Economics101 · 09-06-2025 09:49AM

Replacing the 2% annual rent increase limit in RPZs with an inflation cap will make little or no difference. After all the ECB's target inflation rate is 2% (or maybe slightly less) and they are beyond the control of any future left-wing Irish government, and will likely deliver on this over the medium term.

The real problem will be in allowing reset to market rents when a tenant leaves. This will creat a huge incentive to evict or cajole existing tenants to quit. At very least the PRTB and maybe the courts will be overwhelmed with disputes and litigation.

Don't get me wrong: rent controls are in general a disaster, whose full negative effects only become serious after several years. Getting out of this hole is a really dificult process, and losers are an inevitability.

timmyntc · 09-06-2025 09:54AM

6 year limit if true is just buying time.

Unless the state can do a massive ramp up of social and affordable rent building in next 6 years, there will be absolute chaos once all rents in the state can be raised in 6 years time. Mass defaults/evictions of tenants whose income will almost certainly not have grown enough to keep up. Especially when they could be seeing 2% increase pa. for each of the 6 years up to that point.

Red Silurian · 09-06-2025 10:21AM

My own feeling is it should always have been tied to inflation. When the RPZ's were introduced and the 2% rate applied inflation was running at 0%, that was unfair on tennants. Similarly when inflation was double-digit it was unfair to landlords. This means in recessionary/deflationary times, rents will by law come down. That can only be a good thing for renters

The EUs inflation rate target is 2% but that is only a target that might naturally get missed. I see no reason for landlords or tennants to be out-of-pocket for missed EU targets.

Not sure about allowing current tennancies to reset to the market rate part of the proposals. In theory there should be no difference between the market rate and the rent being paid, but there is. At the very least this highlights a huge flaw in the way market rate is determined

More supply would make all this a non-issue but the government either don't want to increase supply or are just incapable buffoons, or perhaps both, so let's just all bear this in mind firstly and foremostly

6 year limit, new elections in 5 years, would suggest kicking the can down the road and making it somebody elses problem

Ray Palmer · 09-06-2025 11:38AM

https://www.boards.ie/discussion/comment/123527733#Comment_123527733

RPZ was and is a scam to keep rate inflation down at the cost of private citizens. I made it so the landlords who were nice to tenants by not raising rent were punished and cannot get market rates ever. The removal of the rate passing on to new tenants is the minimum that should be changed. While you say inflation was 0% costs to landlords went up at the same time brought in by the government such as RTB, tax increase while insurance and maintenance costs increased. The government also cut HAP and told tenants to break leases. This meant that many landlords were paying more into the property than they planned while facing negative equity. The government told the people that the landlords wouldn't put up rents due to extra charges brought in by the government and made that happen via RTZ and also making HAP refusal illegal. It was deeply unfair and still an issue for landlords. Certainly doesn't make one trust the government.

Inflation is a terrible gauge to use as it doesn't relate to the cost of property being rented.

There are not enough builders to construct the housing and materials are much more expensive. We are not the only ones with a housing crisis

Red Silurian · 09-06-2025 12:09PM

https://www.boards.ie/discussion/comment/123527984#Comment_123527984

The RPZ's were introduced because tennants in some areas were facing 30% rent increases. I myself was "lucky" enough to only have had a 13% increase pushed on me, on the back of 0% inflation, just a few months before they were introduced. If landlords weren't as greedy they never would have been an issue, so really only have themselves to blame

In theory if everybody abided by the market rent everybody would pay and be paid more-or-less the same and there would be no increases or decreases. Is that really what you want?

I'm not sure what tax/RTB hikes landlords had, perhaps you could elaborate? The issue of insurance is another one the govt couldn't care less about

DubCount · 09-06-2025 12:12PM

Rent controls have never worked anywhere in the world. We are no different. Rent controls drive down quality (why increase quality if you cant increase price), reduce supply (LLs who cant increase rents to market levels more likely to leave), and increase rents for new properties (nobody leaves their low rent property, and the reduced supply increases price for new entrants).

Like everywhere in the housing market, Ireland needs more supply. This is especially true of the private rented sector where rent controls and pushing in social housing clients and upping already squeezed demand. A review of RPZs was always going to be needed at some point, so its good that this is finally happening.

Allowing reset of rents to market level at the end of the tenancy is a good move IMHO, but should be accompanied with heavier fines for illegal evictions to avoid tenants being evicted to bring in higher paying rents.

The 2% vs inflation piece makes little difference.

I'm disappointed that tenancies which are currently well below market rents were not addressed. This is likely to be a continuing sell up incentive for existing LLs.

I'm also disappointed that there is nothing being done to address non-paying and overholding tenants. This does more to discourage Buy to let than everything else put together.

Finally, it is refreshing to think this might be the last tinkering by the state in this market. There seems to be new legislation every few months. Nothing kills investment like uncertainty.

Ray Palmer · 09-06-2025 12:39PM

https://www.boards.ie/discussion/comment/123528066#Comment_123528066

If tenants were facing 30% increase that would be because the market rate was more than 30% below the market rate.You may not be aware but rules already existed about rent increases. If it was just to stop increases to existing tenants why then did they make it transferable to new tenants. It was never about the tenants but about keeping the figures down for the government to look better. If you weren't aware of the introduction of PRTB and charges along with changes to the tax rules then you really don't know the history of the renal market and shouldn't be so sure you know how or why there are issues.

Tenants leave property all the time no matter what the rent is. Just had a tenant leave where she was paying 500 a month for a room in a 3 bed apartment just off Merrion Square. Other tenants in the same building pay 1000 a month for a room. How many years will it take to catch up to that rent? The answer is never under current rules. If the property is sold there is a huge tax bill and it is worth less to investors as a result.

BlueSkyDreams · 09-06-2025 01:17PM

https://www.boards.ie/discussion/comment/123528075#Comment_123528075

Good points.

I am not sure how the plan is going to stimulate investment in new builds, when the cap is still being retained under the guise of inflation, rather than just a fixed 2% cap.

It is going to amount to more or less the same thing and the cap will still be there.

Red Silurian · 09-06-2025 03:43PM

https://www.boards.ie/discussion/comment/123528164#Comment_123528164

I presume you mean what the tennant was paying was 30% below market rates? The point of limiting the amount a landlord can raise prices by is to keep rents low. The amount that could be increased was locked to the property, this was to stop a landlord selling the property and the new landlord upping the rent as he or she sees fit. Similarly it stopped landlords from evicting somebody for a frivolous reason and then getting a new tennancy in on a higher rate

The rules before the rent pressure zones were that you couldn't charge more than the rent in your area but then a new home would come up for rent and you could then "benchmark" your own tennancy against it with the result that rents raised as fast as landlords wanted it to. If we go back to that system we would have 100%+ rental increases overnight

When you sell a house you pay capital gains taxes and solicitor fees. You don't pay a "huge tax bill" by comparison to investing in shares for example

Ray Palmer · 09-06-2025 04:01PM

https://www.boards.ie/discussion/comment/123528836#Comment_123528836

Wrong. You needed 3 examples similar to your own property not just in the local area. The reason they wanted to have rents held artificially low was for the reports not really for people. There is no putting the rent up to what they like it is the market rate.

I gave you a clear example of how it is unfair and how it is impossible to catch rent up to the market rates due to existing rules. You are ignoring the facts because your goal is that tenants gets cheap rent that you don't subsidise but other do. Of course you like it because it costs you nothing.

My example shows a 100% increase would be justified and the tenant got a benefit at the cost of a private citizen. If you sell a house and pay CGT then die the inheriting person then pays tax again but not if you keep the property as it is only taxed once at inheritance. Many landlords are elderly and that is on their mind. Are you willing to give the government more tax? Property investment have many restrictions and limitation of liquidity that must be taken into account of when considering value and risk.

Irish Property Market chat II - *read mod note post #1 before posting*

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Irish Property Market chat II - read mod note post #1 before posting