Rent setting in RPZ .The latest HICP % changes are less than 2%

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Millie*

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A house in a non rpz had the last rent set 1/9/23 €1350.
The 2 year market reset never happened because the whole country went into rpz last June.

When I check the rent calculator on the rpz as if I were to reset the rent today more than 2 years later the figures are as follows.

HICP JULY 23 is 118.6
HICP NOV 25 is 122.7

Therefore the HICP % change is only 3.5%

Q1.I am disappointed that the allowable increase is now less than 2% per year.

I thought inflation was flying along or am I missing something?

Q2. The lease renewal and rent reset is next June 26.
How are you supposed to get the correct HICP figures in advance of June 26 to get the exact reset amount allowed and to give the tenant some advance notice if new rent.??

Thanks in advance
 
Yes, inflation is flying along, especially property related inflation. So, even with HICP increases, the rent you get is reducing in real terms. If you continue renting to your tenant, you'll end paying him to live in your property.

My understanding is that you must give three month's notice and that the increase is what the calculator throws up when you give the notice. I'm open to correction on this, but that is the way I've always done it.
 
CharlieMac said:
Does your tenant need 6 months notice of a rent increase?
Click to expand...
Min 90 days notice
Form you need to fill in is here
Rent reviews now extend to over 20 pages each (Form 7pages + proof of calc 2 pages + 3x adverts from daft (3x4pages=12pages)). Its really disproportionate, as some rent reviews are only a few euro per month.

Millie* said:
I thought inflation was flying along or am I missing something?
Click to expand...
You are not missing anything. National wages (measure of tenants ability to repay) have increased 10% over the same period (screenshot at end (1003/912.12)). CPI is up 4.4% (103.7/99.3). The Government are specifically using an index that disadvantages property owners (surprise surprise) as several direct housing ownership costs are excluded (mortgage interest, etc). HICP includes rents instead of house ownership costs, so its a circular calculation to the benefit of tenants (HICP index is lower as rent increases are lower, and rents increases are lower due to that lower HICP index). Sitting tenants are benefiting alot - as well as these real term rent cuts, they also now receive up to €2k tax credit annually.

Over the period Oct20 to Oct25, LL doing annual rent reviews got an 8.1% increase in rents. CPI increased by 24.7% over same period. The tenant got a 16.6% reduction in rent in real terms measured against CPI. The LL net income reduced by much more than 16.6% as their costs increased inline with inflation. If running costs were 15% of rent, they had a 19.3% real terms loss in net income. For sitting tenants that trajectory is to continue. Greenbook sums it up exactly, these properties are now liabilities due to this governments policies.

Millie* said:
How are you supposed to get the correct HICP figures in advance of June 26 to get the exact reset amount allowed and to give the tenant some advance notice if new rent.??
Click to expand...
You can't get them in advance, so you will not be able to set the rent in advance. You'll need to set the rent on the day you do the calculation. Bear in mind the rent setting date, and the date the new rent becomes payable are not the same thing.




National Wage Inflation
1765916465881.webp


CPI Data
1765916578245.webp
 
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