It has been a busy week for property market reporting in Ireland, with most media headlines stemming from the latest release of data by Daft.ie. While nothing in this report should surprise anyone involved in the rental market, the data makes for some stark reading.
Average rents have increased by 12.6 percent as the supply of available properties continued to plummet, with just 716 homes available to rent nationwide on August 1st. The most worrying revelation is that the number of landlords leaving the market has doubled over the past 12 months, to a staggering 5,599. We have been talking about this issue for a number of years now, yet the government remains slow to act. According to the Irish Times this week, ‘Budget support for tenants and landlords are being considered’…
Eoin Ó Broin, opposition spokesperson on housing, has urged the Minister for Housing to put in place a plan to slow down the disorderly exit of single property landlords from the market. Stopping the flow of landlords leaving the market is undoubtedly the outcome needed, however, his policies to achieve this are more likely to accelerate this process rather than stop it – for example, he is calling for another, extended ban on evictions.
This latest Daft.ie report comes days after the Residential Tenancies Board released data showing Notice to Quit figures for Q2 2022 have more than doubled since Q2 last year. There is credible fear that this trend is likely to continue as more landlords exit the market. But, frankly, re-introducing a ban on evictions will only solidify the decisions of disgruntled landlords to leave. It is the wrong measure for the outcome required.
All conversations about undersupply in the private rental sector come back to the complicated, increasingly-burdensome regulations and unfair tax treatment of individual landlords compared with the tax treatment of institutional investors, who pay no tax on rent roll or capital gains.
Government and opposition appear to be in agreement that “all options must be on the table”, however, they differ as to what these options could be and the inevitable market and societal impacts of each option. There can be no doubt that urgent action is needed to tackle the crisis across both our private rental sector and social housing. Government cannot afford for single property landlords to continue to exit the market, particularly when so much social housing is still provided by HAP-supported private rentals. It will be interesting to see if Budget 2023 addresses this head-on, instead of the usual piecemeal approach.
Lotus Investment Group