The Irish press has reported this week that Taoiseach and head of the incoming government, Micheál Martin, has indicated that rent pressure zones (RPZs) may be phased out when their current designation expires at the end of 2025.
Mr Martin said on Sunday that “we have time to see if we can develop an alternative system which protects renters but also a clear, stable environment in which to invest” and that the State needs to “pivot more strongly to getting private sector investment into the market”.
This aligns with the recent Programme for Government which emphasises the need for private investment in the housing market, calling out the need to:
- Achieve stable and predictable policy to attract and retain private investment combined with record state levels of funding to finance the €24 billion per annum needed to build 60,000 homes annually by 2030.
- Develop new financing sources, especially for brownfield sites and small builders, with support from Home Building Finance Ireland (HBFI), the Housing Finance Agency (HFA) and domestic banks as well as state support of equity investment.
The Irish Times is today reporting that a review of the RPZ system is being carried out by the Housing Agency and is expected to be completed by the end of Q1. It indicates that one of the options being considered is a “reference rent” system, which was a recommendation of the Housing Commission in its report published in May 2024. The proposal is that, under such a system, rent increases would be determined by a reference rent for local homes of a similar quality, as opposed to the 2% cap currently imposed by the RPZ system. It remains to be seen whether this, or alternative options, will be favoured by Government.
We will follow developments in this area closely over the coming months. In the meantime, should you have any queries please contact Aoife Smyth, Knowledge Consultant, or your usual ALG Real Estate contact.