Rents in Ireland are ‘way too high’, Housing Minister says

By Gráinne Ní Aodha and Cillian Sherlock, PA

It is expected to take up to four years for rental sector reforms measures to begin to drive increased supply and dampen rising rents, according to a policy review.

Minister for Hosuing James Browne said rents in Ireland are “way too high” as he unveiled a new package of rent controls.

Mr Browne confirmed that rent pressure zones (RPZs) will be extended across the country.

RPZs apply to areas of high demand and cap rent increases at 2 per cent per year.

The RPZ system, which was due to expire at the end of the year, will in effect be extended nationwide from March and see all existing tenancies in Ireland come under a 2 per cent cap or inflation, whichever is lower.

Rent increases in new apartment developments will be capped by inflation and not the 2 per cent cap to incentivise new development of such properties.

The policy direction being taken by Government broadly follows recommendations from the Housing Agency following a review of RPZs.

Asked whether these proposals would reduce average rent costs in Ireland, the Minister said he expected rents “to fall over time” but would not comment over what time period this would happen.

“This is not being presented as a silver bullet. This is to strike a balance, to bring clarity and to bring certainty,” Mr Browne said.

However, the Housing Agency has predicted that the dampening effect on rising rents from increased supply will not be felt until the “longer term” as it will take years for investment decisions around the building of new apartments to be made.

It said standardised average rents are actually expected to increase in the short term but the measures “should act as a stimulus to investment” and improve the retention of smaller landlords in the market, which is particularly important outside of Dublin where institutional landlords are not present.

Its report states: “It will take at least three to four years for this investment to result in more homes being built, but in the longer term any increased supply of rental properties should have a dampening effect on rising rents.”

On the other hand, officials otherwise expect rent to track upwards in the absence of increased supply.

Mr Browne said that financial investors currently “won’t even look at Dublin” because of the 2% RPZ cap, which will be lifted for new apartment developments and replaced with the inflation limit.

On Tuesday, Cabinet agreed to legislate for Mr Browne’s swathe of new rent and tenancy reforms.

New tenancies created from March 1 2026 onwards will be set at market value and offer six-year minimum rolling tenancies.

At the end of the six-year tenancy, the rent can be reset and “put back to the market”, meaning the first series of rent resets under the reforms will take place in 2032.

Large landlords, defined as having four or more tenancies, will be banned from carrying out no-fault evictions for tenancies beginning from March 1st, 2026.

A small landlord can end tenancies via a “no fault eviction” in limited circumstances, such as economic hardship or to move a family member in, but if they do that, they cannot reset the rent.

“If there is a dispute between a landlord and a tenant on what the market value is, they can go to the Residential Tenancy Board (RTB) for adjudication,” Mr Browne said.

“A tenancy of minimum duration of six years is a real leap forward for tenant protections in return for allowing landlords to reset rent.”

The Department of Housing said that all landlords can end a tenancy where there is a breach of tenant obligations or where the dwelling is no longer suited to the tenants.

The cut-off point between a small and large decision is understood to have been a political decision around distinguishing “accidental” landlords with one or two properties from those engaged in “business activity”.

The Department also said that all landlords will have the right to reset rent where the rent is below market at the end of each six-year tenancy, unless a “no-fault eviction” occurs.

The new measures are designed to see a reduction in no-fault evictions.

“Resetting of rents will not be allowed following a no-fault eviction. Rent resetting will only be allowed where a tenant leaves a tenancy of their own volition or has breached their tenant obligations,” Mr Browne said.

The minister added that rent resetting would not be allowed during any tenancy created on or before 28 February 2026 due to the uncertainties it would cause for those with existing tenancies.

Asked about who would police whether the ban on resetting rents except in the case of no-fault evictions is being adhered to, Mr Browne said it would be the Residential Tenancies Board (RTB).

“I would hope that people will report landlords who are breaking the law in this respect,” he said.

He said he was engaging with the Attorney General on what level of fines can be imposed on landlords for breaking eviction rules.

He said they should be “higher” and “substantial” but there are limits in increasing fines before it crosses into the jurisdiction of the courts.

He said he would also “like to see” a rents register that would bring transparency to what a property had charged in rent previously.

“Our rents are way too high in this country, we know that. We know the only way to address that is increasing supply, so we have more competition, and then you will start to see rents go down.”

It is expected the RTB will require increased resourcing to monitor and ensure compliance with the new measures, with an understanding that there have been cases where landlords have abused the current system around evictions and rent increases.

Meanwhile, it is understood a new Housing Plan being developed by the Department will not be ready before the Dáil summer recess in July.