Coming back on my replies earlier
And 2026 projections are for under 3% inflation.
On
@Palatine first point, the 2022 prediction was
3.1%, but it turned out to be over 8% that year (CPM01 table as per CSO). However my real worry would be a repeat of what is probably in living memory for many among us, and that would be a repeat of the early 80's where inflation ran at 90% from 1980-1985 (cumulative). Many rent controlled properties at the time were decimated - some of these remain even to today, and have effectively been appropriated from their original owners. At least in those properties the tenant was responsible for the maintenance, but under the current regime, its the landlord has to maintain it (at market rates of course).
Every year since 2011 has seen increases far more than the rate of inflation. Even if you were unlucky enough to have bought around the peak around 2006 property prices have now increased by over 30%..
In relation to the second point, the national index of house prices increased by 26% from Dec '06 to Oct '25 (HPM09 table as per CSO). Inflation over the same period increased by 33% (CPM01 table as per CSO). Ignoring cap gains tax, they have lost out in real terms on the increase in principal. After Cap Gains gains are paid at 33%, they took a
hit in real terms of 12% on the house price (((100+(126-100)*(1-0.33))/1.33)-100)/100 [0.33=tax rate, 1.33=inflation factor].
However, the main concern, as noted before, is that there are now many scenarios where the house prices cannot achieve its open market value as it will have to be sold with a tenant. Home occupiers will not be able to get a mortgage with a sitting tenant, and thus the value of the house will be tied to the rent. But that rent is mandated to increase at lower than inflation. The landlord will have an impaired principal value.
P.S. A tiny niggling point... I note one poster stating that over five years of permitted increase of 2% p.a. results in an increase of 10% maximum.
It's actually an increase of 11.26% if one increases 2% annually.
I'll put the calcs here. 2% compounded over 5 years is 10.4% (1.02^5-1). However, if one only does a rent review every 5 years, the legislation does not allow for compounding of the 2%. So that's 10%. The RTB RPZ calculator reflects this (screenshot from calculator attached - its exactly 10% (not 10.4%)).
However, given any rent review is capped by the rate of inflation in that period, its almost impossible to get to the 10.4% even if someone did the review annually. I ran the numbers below of the last 5 years assuming a different month one did the annual review.
The five-year cumulative rent increase remains below 10% regardless of the review month. Specifically:
Someone doing February reviews annually from 2020-2025: +7.6% (the lowest)
May reviews: +9.6% (the highest)
Source: HICP Index (table CPM15 from CSO).
Note Dec25 not published yet, I used the Nov25 level
(Example of calc for Feb (1*1.02*1.02*1.02*1.0143)-1=7.6% (no review at all could be done in 2021 as inflation < 0%))
It's a niggling point for me - the property owner doesn't even get the proper 2%! Over the last 5 years, if LL did an annual rent review each February they only got a total increase in rent of 7.6%, while inflation ran and wages increased by 24%!
Those that got the 10% increase by waiting 5 years before issuing a rent review, only got it by forgoing alot of income over the 5 years as they saw no increase in rent during the period.
The whole thing is stacked against the property owner at every turn. I've not even got started on the fact HICP is used, and not a more realistic CPI.
Its funny. I was looking for a way to explain the situation to a few people I know who cant grasp whether they should exit or not. 