Responding to the latest Daft.ie Rental Report for Q4 2023, IPAV, the Institute of Professional Auctioneers & Valuers, said that the decline in rental inflation in Dublin is evidence that the primary driver of achieving stabilisation of prices or greater affordability into the future was supply.
“The property market, for both rental and supply, has been dogged by ill-informed political debate which has resulted in far too many ‘stick’ measures, such as RPZs, (Rent Pressure Zones ) and not enough ‘carrot’ measures such as low interest finance for SME builders and developers," Pat Davitt IPAV Chief Executive, said.
And he said that outside of Dublin, where most building has taken place, largely with the support of investment funds, supply continues to be a major problem.
“Large scale investment has really not expanded much outside of Dublin, and since the ECB has increased interest rates on a massive scale, the future of such investment is looking a lot weaker," he added.
So, he said, policy makers need to look urgently at how new building, for rental and purchase, can be encouraged throughout the country.
“We would say to policy makers, dispense with punishing the providers of property to the market, such as private landlords, and look to incentivising the building of homes,” he commented.
Mr Davitt pointed out that the latest RTB Rent Index shows the number of new tenancies has dropped considerably year-on-year in Q3 2023, going from 22,463, to 14,000, a drop of 37.7%.
“The RTB itself has described this as ‘substantial’,” he said.
IPAV has for some time maintained that the introduction of the RPZ system has contributed to increasing rents that would otherwise not have ratcheted up in many areas, while keeping other rents at a low level that makes good property maintenance non-viable over the longer term.
Mr Davitt pointed to the International Monetary Fund report in November that recommended the removal of rent caps saying: “reducing the complexity and restrictiveness of rent legislations, notably replacing rent caps with more targeted housing support for poor households, would help increase rental housing supply.”
He said the future in relation to rent supply “looks challenging.”
BNP Paribas recently found the Irish investment property market down almost 70% in 2023 compared with the previous year.
“We need to encourage landlords to invest in the market, not demonise them,” Mr Davitt concluded.
