Reports: Government will retain rent controls for existing landlords but lift them for new investors

RTE reported on the news that existing tenants will be subject to the 2% limit for 6 years, after which market rents apply.

That would be a big improvement.

It would be worth investing in apartments with an existing tenant on a very low rent, if you knew that you could get a market rent in 6 years.
 
Bronte said:
The continental model.
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I think a lot of small Irish landlords would be happy to rent a place for a fixed term of, say, 10 years at market value plus agreed small annual increases where the tenant furnishes and is responsible for repairs and maintenance. Also, as you say, onerous tenancy obligations which are enforced. And, indeed, landlord ones which are enforced too.
 
Brendan Burgess said:
It would be worth investing in apartments with an existing tenant on a very low rent, if you knew that you could get a market rent in 6 years.
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Based on what has happened to date, I would think that would be a risky investment. I wouldn't like to bet on what the rules will be in 6 years time. We could have a Sein Fein government or simply a new FF Housing Minister with a completely different view (Browne seems to be very set on reversing some of O'Brien's interventions)
 
The last 6/8 years have been so chaotic that it's difficult to trust that changes will not happen again. There were 6 years tenancies, unlimited tenancies, 4 per cent yearly increase, 2 per cent yearly increases, changes in notice periods , changes in the way notice can be handed, rent freezes and eviction bans... Not sure how the government can encourage any confidence on the new system.
 
Premos said:
The last 6/8 years have been so chaotic that it's difficult to trust that changes will not happen again. There were 6 years tenancies, unlimited tenancies, 4 per cent yearly increase, 2 per cent yearly increases, changes in notice periods , changes in the way notice can be handed, rent freezes and eviction bans... Not sure how the government can encourage any confidence on the new system.
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I couldn't agree more. The new rules will be meddled with as well.
 
Brendan Burgess said:
RTE reported on the news that existing tenants will be subject to the 2% limit for 6 years, after which market rents apply.

That would be a big improvement.

It would be worth investing in apartments with an existing tenant on a very low rent, if you knew that you could get a market rent in 6 years.
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Six years starting when - from the date of the cabinet approval or the internal tenancy clock i wonder?
 
Of course the other thing with this market rent reset mechanism into a deeply constrained market is just a huge incentive from a landlord perspective to set the new six year rent at the most aggressive level they think might be possible.....knowing your stuck with it at + 2% p/a for six years......your going to get landlords sitting tight holding out for somebody in a pickle to consummate a new tenancy and so your going to get some outrageously high rent price inflation down the road that's for sure.....and now it becomes clear why six years was chosen.... out past the 2029 election.....and into the early to middle portion of the next Government's tenure!
 
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letitroll said:
Of course the other thing with this market rent reset mechanism into a deeply constrained market is just a huge incentive from a landlord perspective to set the new six year rent at the most aggressive level they think might be possible.....knowing your stuck with it at + 2p/a for six years......your going to get landlords sitting tight holding out for somebody in a pickle to consummate a new tenancy and so your going to get some outrageously high rent price inflation down the road that's for sure.....and now it becomes clear why six years was chosen.... out past the 2029 election.....and into the early to middle portion of the next Government's tenure!
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I think it will be more of an incentive not to let to anyone who is likely to be a long term tenant as it seems you can reset to market rent if a tenant leaves before the end of the 6 year period. Why would you rent to somebody who was likely to stay the 6 years when you can't sell durng that period and increases are capped. Much better to rent to some tech type who'll be off within 18 months; you have control of the property again and can re-let at market rent if that is what you decide to do.

If my understanding of how this will work is correct, one thing it will certainly do is incentivise letting to short term tenants. A long term tenant is a positive disadvantage.
 
Greenbook said:
Why would you rent to somebody who was likely to stay the 6 years when you can't sell durng that period and increases are capped.
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Yep good point - if your a foreign born Google/Meta/TikTok employee renting an apartment in D2 you just became a preferred tenant to a landlord.....if your a native Dublin metro prospective renter you might not be getting an email back from any of your Daft.ie inquiries moving forward.....you instantly just became a terrible strategic business decision for a landlord.

Some folks like to call this stuff unintended consequences.....that would be true if the literature on rent controls and the distortions they create wasn't so overwhelming.

If you had a time machine you'd first go back and stop baby Hitler.....next thing you might do is go back and stop the introduction of RPZ in 2016. It's been in aggregate a disastrous policy (the only winner is an RPZ tenant who's been in situ since 2016....a very small number).....all entirely predictable from a 100yrs of economic case studies on rent controls and the damage they do.

"Oh what a web we weave when first we try to deceive.....that there are severe housing shortages"
 
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Greenbook said:
I think it will be more of an incentive not to let to anyone who is likely to be a long term tenant as it seems you can reset to market rent if a tenant leaves before the end of the 6 year period.
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My thought too. As the situation has been shifting and changing regularly, that is already the approach we have been taking.
letitroll said:
the only winner is an RPZ tenant who's been in situ since 2016....a very small number
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You don't to need to be a tenant since 2016. Just need to be in rpz in a property rented since then.
 
faketales said:
Good point about kicking the can into the next election cycle.

Everything is politics.
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Yeah waiting for details on when the six year timer starts......nakedly political if its six years from cabinet approval.

Alas IMO this centre right Government has already blown election 2029 and handed it to a coalition of the left......I'm not seeing enough radicalism in policy to jolt housing supply sufficiently.....and the new housing supply estimates just keep trending downwards.....the low end whisper number in Government right now is 28,000 units for 2025! Imagine a housing crisis where the housing supply is trending down YoY!

New build exemptions to RPZ rules are really just hostages to fortune to a future change of government.....just way too easy to subsume them back into RPZ writ large with the stroke of Eoin O'Broin's pen.

Any institutional investor worth his salt as part of DD would have to go back to his investment committee and flag this risk......the issue for the Government is that once they went down this RPZ road (which was a mistake) they decided to compound that mistake by making the rules even more draconian.....the 2% max increase was pure insanity......its simply a no go for institutions to get into an investment now (after the COVID inflation period) where there isn't some inflation protection.

Remember the reason institutions even step into residential tenancies and out of Government bonds is for an income stream that has inflation protection......if you want an investment with no inflation protection they exist and you dont get calls from them about the pipes bursting....they are called government and corporate bonds. Property is relatively more attractive because of the escalating income stream.
 
This report in thejournal.ie says the rules for existing tenants will stay the same, max 2% in rpz but rents can be reset to market rates for new tenancies. It also says that “tenancy protections will also be brought in, which will see a six year security of tenure for renters”. Anyone know what that might be? Don’t tenants already have unlimited occupancy now with very few reasons for a landlord to terminate.

www.thejournal.ie

Plans to tie rents for new build apartments to inflation rate being brought to Cabinet

Under the proposal, the 2% rent cap will not apply to apartments built after a certain date.
www.thejournal.ie www.thejournal.ie
 
The 2% increase is the max you can increase the rent in an RPZ if inflation is lower.
My last increase allowed a 1 euro per month increase. Routine annual servicing of the heating system alone ( no parts) increased by 25 euros.
My property is 50% below market rates. Same Tenants since before the RPZ
Meanwhile a similar size property ( cost rental ) which is not in as good an area is advertised at 19% higher price.
Politicians have to get real.
 
Premos said:
You don't to need to be a tenant since 2016.
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Market rents were in a trough in 2012. Plenty of landlords don’t increase rents in line with market in 2012-16…..then got stuck.

Anyone with a 2012-era tenancy is making bank. I rented a property in July 2012 for €1,500 and moved out a year later. I looked at tenancies in the same development today and they are >€3k.

Add to that the development is owned by an institution who really looked after the place and did well by tenants.
 
letitroll said:
they decided to compound that mistake by making the rules even more draconian.....the 2% max increase was pure insanity
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The 2% or inflation if lower came about because in 2020, the increase was 4%. That annual increase was paused due to Covid, so tenants were facing an 8% increase. To avoid that HICP was introduced by Darragh O'Brien even though this wasn't in the program for government, it originally featured in the Sinn Fein election manifesto. Inflation went mad and HICP was about 9% in 2021, so to avoid that the 2% cap was brought it. All reactive, no joined up thinking. Then in January 2025, the government seems to have realised for the first time that the institutional investors had all left.
 
Protocol said:
The aim of public policy should be to halve market rents from current levels
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Yes, it should. It is ridiculous that small towns in Ireland have rents the equivalent of European capitals (if you can find someplace to rent, that is).

One long term problem is that new builds are so expensive to build, you need a high rent to get to the 4%/6% yield investors require.

This is one appalling mess from landlord's perspective (the constant rule changes, the RPZ's) but much worse for tenants and society as a whole.

I've been a landlord for nearly 30 years now. I'd love to go back to the 90's. It was much less fraught.
 
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