And still we wait…

Despite increasing talk of tax changes designed to keep landlords in the market – and indeed to incentivise new landlords – Tánaiste Micheál Martin confirmed that the Irish Government will not introduce any measures prior to Budget 2024, instead, the Government maintains that a “comprehensive package” addressing the rental sector will be introduced in the next budget. This decision comes in the wake of the Residential Tenancies Board’s report revealing a significant surge in landlords issuing notices to quit to tenants, with 4,741 notices sent between July and September 2022, compared to 1,666 in the previous quarter.

The Government’s stance is to avoid “knee-jerk” responses to the growing trend of evictions in the rental sector, as such measures may have unintended consequences. As most people here will be well aware, long before the eviction ban was implemented, Paschal Donohoe dismissed several proposals aimed at retaining small landlords in the market. Right now, the Government is evaluating options for incentivising these landlords in the next budget, which may include tax deductions, exemptions, or reduced tax rates.

As the eviction ban is set to be lifted at the end of this month, Housing Minister Darragh O’Brien has announced emergency measures to mitigate the rise of homelessness resulting from eviction notices. These measures include assisting local authorities in acquiring up to 1,500 homes from landlords exiting the rental sector and leasing an additional 1,000 homes for social housing from property investors and developers.

Martin stated that the Government’s existing measures are working, but more needs to be done to address rental sector issues and the broader housing market. He emphasised the importance of increasing the number of new homes built and focusing on modular and other rapid-build housing to boost social and affordable housing construction on public land.

This comes less than a week after the Taoiseach acknowledged the need for quarter of a million new homes across Ireland, and within days of new data from Banking and Payments Federation Ireland (BPFI) which indicated that fewer than 27,000 new housing units are likely to be delivered this year. Despite the many challenges, housing supply saw a significant recovery in 2022, with almost 30,000 new homes completed, a 45 percent increase from 2021 and a 41 percent rise from 2019 – apartment completions accounted for over 30 percent of all completions in 2022, surpassing the combined total of the previous two years. On a positive note, January 2023 saw a record 2,108 housing units commenced, the highest level for the month since 2008.

Looking at the broader market, mortgage market activity also rebounded in 2022, with 52,634 mortgage drawdowns valued at €14.1 billion, the highest level since 2008. The Help-to-Buy scheme saw over 7,000 applications in January 2023 alone, a 36 percent increase compared to the previous year.

Despite strong housing and mortgage activity in 2022, BPFI’s Chief Executive, Brian Hayes, in an interview on RTE, warned that building cost pressures and interest rate increases may impact housing supply and mortgage demand in the short to medium term. 

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group