Recently almost all of the Irish media trumpeted the fact that a popular property website Daft.ie reported the average Irish rental to be in excess of €2,000 per month for the first time. A show-stopping, shocking revelation, a metric that chilled the bones of those subjected to the drumbeat of breathless media reporting and the positive glee of opposition politicians (for whom the metric was a stick with which to beat the current government). It is also a metric that anyone who has even a passing knowledge of the Irish rental market knows is a gross over-estimation of the rents people actually pay. One must note that, in Ireland, opposition parties’ only solutions are obviously—you guessed it—more state interventions in the property and rental sector.

The appropriately named Daft metric is heavily weighted towards properties which are new to the market and represents a tiny fraction of the properties rented in the country. 2,300 properties available to rent in a market where there are approximately 240,000 tenancies registered with the Residential Tenancies Board “RTB”). Currently, 83 percent of Irish tenancies are subject to rent control as they are within Rent Pressure Zones (RPZs).

It was once said a squirrel could cross Ireland from coast to coast without touching the ground such was the abundance of trees. One can now cross Ireland from coast to coast without stepping outside an RPZ. Such has been the increasing number of areas being deemed RPZ’s by government bodies (see below for a few snapshots of areas deemed RPZs over time).

I have noted previously in this publication how RPZ’s work. To recap, when a property is first rented out, its rental value is determined by (broadly speaking) the market rate. However, subsequent rental increases are capped at the lower of the consumer Price Index (CPI) and 2 percent. This is so even if the existing tenants leave the property. The landlord cannot charge a new tenant any more rent than the existing tenant could have been charged, had they stayed (although new proposals suggest change here).

Prior to 2021, rents could be increased by 4 percent per annum under the RPZ regime, but during the covid pandemic a rent freeze and a moratorium on evictions were imposed. Landlords were entitled to then catch-up by increasing rents by 8 percent (2 x 4 percent) under the previous iteration of the RPZ regime. To prevent this, the government enacted the “lower of 2 percent and CPI change” rule which the President of Ireland signed into law quickly.

Properties can be excluded from the rent caps on limited grounds; extensive refurbishment or the owner taking possession for either their own occupation (or that of a family member). Once a property is “off” the rental market for two years, it can be reintroduced as an uncapped property.

Sale of the property does not break the cap, so a new purchaser of a property which has been rented out previously must observe the caps that bound the property prior to the sale, if they rent the property out. Therefore, investors pay a relative premium for uncapped second-hand properties or new properties. Buying investors are incentivised to seek the highest possible rent when the rent is first set (both to compensate for the higher purchase price and to set a higher base rent upon which future capped increases can be calculated). It also encourages current landlords who wish to sell to sell to owner-occupiers (circa 71 percent of landlord sales in 2023 were to owner-occupiers).

Both incentives tend to either drive uncapped rents higher than they would be in a free market or reduce the number of properties available to rent, which tends to drive uncapped rents higher than they would be in a free market!

The below reporting on the Dublin property market of a well-known estate agent in central Dublin, who operates in prime areas for investors to buy and rent out properties (the area includes a neighborhood known as “Gulag Google,” such is the preponderance of technology employers and employees located there). This reporting only covers transactions this agent is involved in but bears witness to the flight of investors from the Irish residential property market referred to above.

The 18 percent of buyers being investors in 2024, was the lowest level the agent had observed in 17 years but so far in 2025, the number is even lower at 17 percent of buyers being investors. These data point to an ever-tightening rental market.

The opposition political parties’ reactions to the RPZ rules incentivizing landlords who sell in order to sell to owner-occupiers aim to outlaw landlords from selling to owner-occupiers! What an encouragement for private landlords to invest in residential property! Invest your money, have your income frozen, and you can only sell to categories of people that we approve of (another investor). This would turn the private rented sector into a form of roach motel—you can check in (invest), but you can never check out (divest), unless you find another investor willing to take your place. The political opposition fail to understand that rent controls eventually turn every rented property into a different kind of roach motel! Something even the Brookings Institute accepts.

At least some journalists feel unable to report on the new rental averages reported by Daft without acknowledging the fact that the RTB produces the most accurate and complete metrics on the rental market. However, even these journalists dismiss this more representative dataset—which does not support the alarmist Daft metric—as “missing the point.” The “point,” apparently, is not that most Irish rents are nowhere near this level, nor that rent increases are capped for most tenants, nor even that the Daft metric is “large,” but that rents are increasing at all!

The media then attempt to tug reader’s heartstrings by interviewing a handful of individuals who bemoan their circumstances, but they have gone too far in quoting one person: “There’s no way you could bring a baby into this environment. In the middle of the city center.” The impossibility of raising a child while living in a city center apartment will be news to many people around the world, including in Ireland.

The journalist in question is told that one tenant in Dublin (in a capped property) could be paying 50 percent of the rent paid by that tenant’s neighbor in an identical uncapped property. This is a predictable and necessary consequence of how RPZs operate.

Tenants whose rent is indexed to a level that was set years ago (and which now can only go up in annual increments of the lesser of 2 percent and the change in the CPI), are incentivized to stay put or to move to another rent-controlled property. (Remember tenants leaving a property does not allow the landlord to increase their property to “market rent”). The journalist displays a remarkable lack of curiosity in not trying to ask why such a disparity happens, either for their own knowledge or that of the reader. One suspects the journalist knows why it happens.

There are true free market rents in Ireland currently; we have a two-tier system (imposed by state intervention) in which the vast majority of the tenants pay controlled rents (and have no incentive to move except to another controlled property) with a tiny minority of new tenancies (whose prices jump dramatically on the margin, and which jumps are fueled by the interactions of the rules discussed above). However, new investors know that their “bonanza” rental prices can only increase by a maximum of 2 percent a year (no matter what costs do) and also know—from the 2021 experience—that even this limited ability to increase rents can be taken away with breathtaking speed and capriciousness, should it be politically expedient.

The flight of private landlords from the market since the introduction of RPZs in 2016 suggests that being a landlord in Ireland is far from a profitable and definitely a very poorly protected business from a legal perspective. These landlords—many of whom were escaping negative equity as and when they could—had no interest in struggling by and being vilified by a stream of ill-informed, economically-illiterate, and opportunistic invective.

It appears the Irish government is currently considering changing the rules. However, details are currently unclear. How will the cap be calculated? Will the system be nationwide or “geographically limited” like RPZs are (even though now RPZs currently affect 83 percent of all tenancies)? Will it have no sunset clause, or will it be like the RPZ regime, which must be renewed on a periodic basis? These are all-important questions as the level of restriction of property rights will most probably determine whether or not the constitutionality of the legislation will be challenged and how/by whom.