Decision to make changes to the rental sector - Rental market reforms

We reviewed rent control studies from Ireland and abroad, consulted with landlords, tenant advocacy groups, investors and academics.

Key findings

• RPZs have successfully slowed rent increases.
• Outside RPZs, tenants faced steeper rent hikes.

Reduced supply of rental homes

However, the 2021 tightening of rent controls—especially the rule limiting increases when inflation exceeds 2% meant:

• Below-market rents: Long-term tenants often paid significantly less than new market entrants, creating a gap that landlords couldn’t legally close.
• No reset on new tenancies: Even when a new tenant moved in, landlords were required to base the rent on the previous tenant’s rent, limiting their ability to adjust to current market conditions.
• Financial pressure: This made it harder for landlords to cover rising costs (e.g. maintenance, insurance, mortgage interest), especially during periods of high inflation.
• Exit from the market: Many landlords cited this restriction as a key reason for selling their rental properties, contributing to a decline in rental supply.

Reduced supply presented as:

• A rise in rental properties being put up for sale.
• A decline in rental listings, especially from small-scale landlords.
• New rental developments becoming less financially viable.

Impact of reduced rental supply:

• Less rental housing leads to higher rents over time.
• Tenant mobility is affected—people find it harder to move.
• Landlords may cut back on property upgrades due to lower returns.