‘Rent Pressure Zones’ – The Facts
- The measures will cap rent increases in the designated zones to 4% per year over a three year period.
- These are areas where annual rent increases have been at 7% or more in four of the last six quarters and where the rent levels are already above the national average.”
- The measures are being brought in straight away in the four council areas in Dublin, and in Cork city. Galway City is also likely to be introduced as a rent pressure zone.
- Rent pressure zones will be designated for a maximum 3 years, by which time new supply will have come on stream and pressures will have eased somewhat in these areas.
- Measures were introduced last year by then-housing minister Alan Kelly, which included longer notice periods for any rent increases and a two-year limit on how often rents could be reviewed has not worked.
- Since then, rents have continued to climb. Over the past 12 months, prices have gone up 8.6% nationally, according to the latest figures from the RTB.
In the short term, those areas not included as rental pressure zones could see an increase in investment e.g. properties in commuting distance to rental pressure zones and other smaller urban areas. This may be a welcoming change for home owners in these areas. Mr. Coveney has moved away from a complete rent cap as this would have devastating consequences in terms of supply. In the short term, renters would have benefited from rent caps however in the medium term, we could have seen investment move out of the Irish rental sector. This would leave renters with little or no accommodation to choose from in an already scarce market.