DUBLIN (Reuters) -Ireland made minor changes on Tuesday to rent controls, seeking to strike a balance between what the housing minister described as a "doubling down" on protecting tenants from some
Ireland Adjusts Rent Controls to Encourage Homebuilding Revival
DUBLIN (Reuters) -Ireland made minor changes on Tuesday to rent controls, seeking to strike a balance between what the housing minister described as a "doubling down" on protecting tenants from some of Europe's highest rental costs and encouraging much-needed construction.
Ireland introduced the controls in 2016, initially in urban areas, to slow runaway rental costs and buy time for housing supply to catch up with demand. However, homebuilding stalled at 30,000 units last year, far below the government target of an average of 50,000 new homes a year to 2030.
A 2% annual cap will remain in place for sitting tenants but landlords will be able to reset rents at much higher market rates between tenancies starting from March 2026 if a renter leaves voluntarily or breaches their agreement.
Research this year from Daft.ie, Ireland's largest property listings site, showed rents jumped by 47% for tenants who moved homes since the cap was cut to 2% from 4% in 2021, while rents for those who did not move increased by just 7%.
Apartment rent increases in new developments will no longer be capped at 2%, but can instead follow the rate of inflation, a change Housing Minister James Browne said was aimed at bringing back international investors who currently "won't look" at the market.
Ireland's central bank forecasts average annual inflation of 2.1% next year and 1.4% in 2027. While this would limit investor returns in the short term, Browne said it removed the tail risk of high inflation pushing investments into a loss.
Property developers have said rent controls, as well as higher interest rates, have choked the supply of new rental homes. The number of apartments built in 2024, largely earmarked for the rental sector, tumbled 24% year-on-year.
However, opposition parties have criticised the government for considering any changes, citing a more than doubling of rental costs since the aftermath of a property crash in 2013.
Browne said the changes were "just one strand of a suite of measures" that would include future actions in other areas to boost supply.
(Reporting by Conor Humphries and Padraic Halpin; Editing by Emelia Sithole-Matarise)
