There's a clear need for reform of rent controls, according to the ESRI. Its new report says the current system causes confusion around what increases landlords are allowed to implement, and has suggested a number of options for reform.
The report confirms that RPZs have severely restricted the supply of private rental accommodation, with the drop in apartment completions a direct result of market distortions caused by rent controls.
Among those is revising the current cap, which is two percent, or allowing landlords to reset rents when homes become vacant.
The ESRI says the current system has served its purpose:
It said ''Housing supply in 2024 was somewhat disappointing, with completions coming in at 30,330 units, heightening fears that housing costs will continue to escalate in the domestic economy.''
''While numerous factors are likely to be affecting housing supply, a ‘funding gap’ and the policy around rent controls, are likely to weigh on supply.''
The Irish Property Owners Association (IPOA) welcomes the findings in the Quarterly Economic Commentary for Spring 2025 which shows that rent pressure zones (RPZs) are significantly contributing to the rental crisis.
The IPOA is renewing its call for a reset to market rents between tenancies, allowing rental prices to adjust in a controlled manner. This would incentivise landlords to remain in the market and encourage further investment in rental properties.
They say the regulatory environment is a primary driver in deterring investment. The ESRI’s findings align with previous warnings, that “the current calibration of RPZs likely acts as a barrier to this” aligns with the 2024 Housing Commission report with similar findings.
Across other rental markets, rent controls have proven costly and detrimental to long-term growth and supply.
In addition, the finding that rental inflation within RPZs has remained limited dispels the myth that landlords are breaching RPZ regulations. The focus must now shift from employing restrictive rent controls to implementing real solutions that increase housing supply and ensure a sustainable rental market.
Mary Conway, Chairperson of the IPOA, said:
“The IPOA has repeatedly warned that RPZs and policies like indefinite tenancies drive away investment, ultimately harming tenants and restricting mobility. A 24% drop in apartment completions is alarming and highlights the urgent need for regulatory change.
If the Government is serious about reviewing RPZs this year, it must listen to those on the frontline: private landlords who provide critical housing for thousands of tenants. The only viable solution is to allow a return to market rents between tenancies. Without a recalibration, rental supply will continue to fall short of market needs and further exacerbate the housing crisis.”
