I think that Ceist Beag doesn't fully grasp the business model in play. There are 3 key stakeholders to each tenancy agreement, the asset owner (yes it is an earning asset), the tenant who is the debtor and the government who although is a significant beneficiary (~50% tax on rent) but yet does not have any skin in the game... (i.e. landlord's risk is similar to having eggs and bacon for breakfast, the chicken is involved, but the pig is committed...).
Very simple and approximate numbers below:
For example, a landlord will borrow €200,000 @ ~5% from a lending institution (semi commercial rate). Landlord will contribute an additional €50,000 (80% max lending limit, stamp duty, legal costs).
Furnishing costs ~ €10,000 (capitalized @ 12.5% annually, not expensed). Property tax/levy not a deductible expense.
Example 1
Tenant pays €1,000 per month, ~€500 of this is paid by way of income tax by the landlord (assuming top rate PAYE). Landlord has ~€500 net of tax monthly. Until recently only 75% of this interest cost was a deductible expense, but is being graduated back to 100%. (Interest portion only).
Monthly mortgage cost paid by landlord (Principal and Interest) ~ €1,200 per month assuming 20 year repayment term.
Landlord has additional costs including PRTB registration, Buildings Insurance, Life Assurance (usually a condition precedent by the lender).
This example is not financially sustainable for the landlord.
Example 2
Same property, Tenant pays €2,000 per month, ~€1,000 of this is paid by way of income tax by the landlord (assuming top rate PAYE). Landlord has ~€1,000 net of tax monthly.
Mortgage cost paid by landlord (Principal and Interest) ~ €1,200 per month assuming 20 year repayment term.
Landlord has additional costs including PRTB registration, Buildings Insurance, Life Assurance (usually a condition precedent by the lender).
Hours worked and travel costs incurred by landlord in letting a property or dealing with repairs etc is not rechargeable. Allowing for a sinking fund, this is just about break even net of tax and running costs.
I trust you can see that government tax take and the reduced ability to offset landlord costs under this business model is penal and is the main driver of increased rents.
Effectively, landlords are collecting a significant amount of tax for the state without the state having to expend any real effort or carry any risk.
As tenancies naturally expire landlords are and will continue to exit the Irish rental market to seek better return for all the risks and costs involved in this highly volatile market.